New Tax Laws - Linkenheimer LLP CPAs & Advisors

Important Update: The Corporate Transparency Act and Its Impact on Your Business

Starting January 1, 2024, a significant change will affect many businesses. The Corporate Transparency Act mandates corporations, limited liability companies (LLCs), limited partnerships, and other entities such as non-U.S. companies that register to do business in the U.S. through a filing with a Secretary of State to file a report with the Financial Crimes Enforcement Network (FinCEN). This report will disclose detailed information about the entity’s “beneficial owners.” Most entities must file these reports by January 1, 2025. However, new entities formed in 2024 must file the report within 90 days of the entity’s formation.

Key Points to Note:

Purpose: This federal initiative aims to combat money laundering and tax evasion by shedding light on the actual individuals behind corporate entities.
Reporting Requirements: The information required includes the legal name, residential address, date of birth, and an identification number (from a passport, driver’s license, or state ID) of the beneficial owners; the entity will also have to provide an image of any of these forms of documentation.
Penalties for Non-Compliance: Failing to report or update this information can lead to substantial fines, including fine of up to $500 per day until the violation […]

By Linkenheimer LLP|2024-01-04T17:01:35+00:00January 4th, 2024|business, llc, New Tax Laws, News, s corp|0 Comments

Education Benefits Help Attract, Retain and Motivate Your Employees

One popular fringe benefit is an education assistance program that allows employees to continue learning and perhaps earn a degree with financial assistance from their employers. One way to attract, retain and motivate employees is to provide education fringe benefits so that team members can improve their skills and gain additional knowledge. An employee can receive, on a tax-free basis, up to $5,250 each year from his or her employer under a “qualified educational assistance program.”

For this purpose, “education” means any form of instruction or training that improves or develops an individual’s capabilities. It doesn’t matter if it’s job-related or part of a degree program. This includes employer-provided education assistance for graduate-level courses, including those normally taken by individuals pursuing programs leading to a business, medical, law or other advanced academic or professional degrees.

More requirements

The educational assistance must be provided under a separate written plan that’s publicized to your employees, and must meet a number of conditions, including nondiscrimination requirements. In other words, it can’t discriminate in favor of highly compensated employees. In addition, not more than 5% of the amounts paid or incurred by the employer for educational assistance during the […]

By Linkenheimer LLP|2023-05-01T16:23:49+00:00May 1st, 2023|benefits, New Tax Laws|0 Comments

California Conforms to IRS: More Time to File State Taxes for Californians Impacted by Winter Storms

SACRAMENTO – In addition to tax relief measures that Governor Gavin Newsom announced in January, California is also extending the state tax filing and payment due dates to October 16, 2023 for Californians impacted by the winter storms in December and January. This aligns California with the Biden Administration, which announced that the IRS extended various due dates until October 16, as well.

“As communities across the state continue recovering from the damage caused by the winter storms, California is working swiftly to help recovering Californians get back on their feet,” said Governor Newsom. “The state is aligning with the Biden Administration and extending the tax filing deadline in addition to the tax relief announced earlier this year.”

Last month, Governor Newsom announced tax relief for those impacted by winter storms, giving people the ability to claim a deduction for disaster loss and extending certain filing deadlines.

The following counties are eligible for this extended tax relief, per the IRS announcements here and here:

Residents and businesses in Alameda, Alpine, Amador, Butte, Calaveras, Colusa, Contra Costa, Del Norte, El Dorado, Fresno, Glenn, Humboldt, Inyo, Kings, Lake, Los Angeles, Madera, Marin, Mariposa, Mendocino, Merced, Mono, Monterey, Napa, Nevada, Orange, […]

By Linkenheimer LLP|2023-03-07T19:48:04+00:00March 3rd, 2023|CA tax, california, disaster, filing deadline, ftb, irs, New Tax Laws|0 Comments

The Inflation Reduction Act: What’s In It For You?

You may have heard that the Inflation Reduction Act (IRA) was signed into law recently. While experts have varying opinions about whether it will reduce inflation in the near future, it contains, extends and modifies many climate and energy-related tax credits that may be of interest to individuals.

Nonbusiness energy property

Before the IRA was enacted, you were allowed a personal tax credit for certain nonbusiness energy property expenses. The credit applied only to property placed in service before January 1, 2022. The credit is now extended for energy-efficient property placed in service before January 1, 2033.

The new law also increases the credit for a tax year to an amount equal to 30% of:

The amount paid or incurred by you for qualified energy efficiency improvements installed during the year, and
The amount of the residential energy property expenditures paid or incurred during that year.

The credit is further increased for amounts spent for a home energy audit (up to $150).

In addition, the IRA repeals the lifetime credit limitation, and instead limits the credit to $1,200 per taxpayer, per year. There are also annual limits of $600 for credits with respect to residential energy property […]

By Linkenheimer LLP|2022-08-30T16:44:13+00:00August 30th, 2022|inflation, New Tax Laws, vehicles|0 Comments

Inflation Reduction Act Provisions Of Interest To Small Businesses

The Inflation Reduction Act (IRA), signed into law by President Biden on August 16, contains many provisions related to climate, energy and taxes. There has been a lot of media coverage about the law’s impact on large corporations. For example, the IRA contains a new 15% alternative minimum tax on large, profitable corporations. And the law adds a 1% excise tax on stock buybacks of more than $1 million by publicly traded U.S. corporations.

But there are also provisions that provide tax relief for small businesses. Here are two:

A payroll tax credit for research

Under current law, qualified small businesses can elect to claim a portion of their research credit as a payroll tax credit against their employer Social Security tax liability, rather than against their income tax liability. This became effective for tax years that begin after December 31, 2015.

Qualified small businesses that elect to claim the research credit as a payroll tax credit […]

By Linkenheimer LLP|2022-08-29T21:45:48+00:00August 29th, 2022|ira, New Tax Laws|0 Comments