path act - Linkenheimer LLP CPAs & Advisors

Keep an Eye Out for Extenders Legislation

The pieces of tax legislation garnering the most attention these days are the Tax Cuts and Jobs Act (TCJA) signed into law last December and the possible “Tax Reform 2.0” that Congress might pass this fall. But for certain individual taxpayers, what happens with “extenders” legislation is also important.

Recent history

Back in December of 2015, Congress passed the PATH Act, which made a multitude of tax breaks permanent. However, there were a few valuable breaks for individuals that it extended only through 2016. The TCJA didn’t address these breaks, but they were retroactively extended through December 31, 2017, by the Bipartisan Budget Act of 2018 (BBA), which was signed into law on February 9, 2018.

Now the question is whether Congress will extend them for 2018 and, if so, when. In July, House Ways and Means Committee Chair Kevin Brady (R-TX) released a broad outline of what Tax Reform 2.0 legislation may contain. And he indicated that it probably wouldn’t include the […]

By Linkenheimer LLP|2018-08-21T19:30:51+00:00August 21st, 2018|New Tax Laws, tax|0 Comments

Accelerated Filing Deadline for Forms W-2 and 1099

The Internal Revenue Service today reminded employers and small businesses of a new Jan. 31 filing deadline for Forms W-2. The IRS must also hold some refunds until Feb. 15.

A new federal law, aimed at making it easier for the IRS to detect and prevent refund fraud, will accelerate the W-2 filing deadline for employers to Jan. 31. For similar reasons, the new law also requires the IRS to hold refunds involving two key refundable tax credits until at least Feb. 15. Here are details on each of these key dates.

New Jan. 31 Deadline for Employers

The Protecting Americans from Tax Hikes (PATH) Act, enacted last December, includes a new requirement for employers. They are now required to file their copies of Form W-2, submitted to the Social Security Administration, by Jan. 31. The new Jan. 31 filing deadline also applies to certain Forms 1099-MISC reporting non-employee compensation such as payments to independent contractors.

In the past, employers typically had until the end of February, if filing on paper, or the end of March, if filing electronically, to submit their copies of these forms. In addition, there are changes in requesting an extension […]

By Linkenheimer LLP|2020-09-03T20:05:02+00:00November 1st, 2016|w2|0 Comments

2015 PATH Act Amendments Regarding Vineyards

One of the more interesting and potentially very beneficial amendments to the Internal Revenue Code as a result of the 2015 PATH Act related to vineyards are the new provisions related to bonus depreciation and the deemed time of placement-into-service to an earlier date for certain fruit bearing trees and vines.

Under the old provision (IRC §168(k)) the allowance of 50% bonus depreciation would only be available in the year the property is placed into service. In the case of fruit bearing grape vines, this would be when the vine becomes income producing (typically a few years after planting).

However, under the new amendment (IRC §168(k)(5)) the rules shifted the deemed time of placement-into-service to a much earlier date. Grape vines now become “qualified property” when planted and are eligible for the 50% bonus depreciation in their first year.

There are other caveats to the new provisions, however generally taxpayers will be allowed depreciation deductions sooner for planted vines. If you think this may apply to you or you’re interested in hearing more, please feel free to contact us and one of our professional staff would be happy to help you.

Note: This provision only applies to vines […]

By Linkenheimer LLP|2020-09-03T20:05:17+00:00December 31st, 2015|depreciation|0 Comments

PATH Act Changes to the Research Credit

The recently enacted “Protecting Americans from Tax Hikes Act of 2015” (i.e., the 2015 PATH Act) contains a provision making permanent the popular research credit. This credit encourages businesses to invest more in R&D by allowing a tax credit for spending on qualified research. The credit (1) is for 20% of current year qualified spending that exceeds a base amount related to gross receipts in certain earlier years and (2) can’t exceed 10% of the total spending in the current year on qualified research. Alternatively, taxpayers can irrevocably choose a simpler calculation.

The credit had lapsed for expenditures in 2015, but the legislation is also effective for those expenditures.

And importantly, the new law also makes two major changes to the credit, both favorable to small businesses. First, it provides that beginning in 2016 eligible small businesses ($50 million or less in gross receipts) may claim the credit against alternative minimum tax (AMT) liability. Also, beginning in 2016, the new law also provides that the credit can be used by certain even smaller businesses against the employer’s portion of the Social Security portion of the employer’s payroll tax (i.e., FICA) liability.

By Linkenheimer LLP|2020-09-03T20:05:18+00:00December 31st, 2015|research credit|0 Comments