Tax

Though the election has come and gone, very little has been resolved in terms of which political party, if any, will be able to dictate legislation in 2021. Barring any recount or court challenge, President-elect Joe Biden will take office in January, though the U.S. Senate may still be under Republican control depending upon the outcome of Georgia run-off elections...

Among their many differences, President Donald Trump and former Vice President Joe Biden have widely divergent tax proposals. Their stances could have a major impact on the amount of taxes you’ll owe in the future. Here’s an overview of each candidate’s tax proposals for both individuals and businesses. Trump’s tax proposals for individuals The GOP-backed Tax Cuts and Jobs Act (TCJA) was signed into law in December 2017...

Dial in your accounting, cashflow and tax strategies As challenging as this year has been, it has also revealed an impressive amount of ingenuity and just-keep-moving-forward resiliency by businesses, individuals, and communities alike. Still, this question remains: how do the events of 2020 and the ways in which we’ve all reacted affect the bigger picture — operations, cashflow, tax strategy, reporting — and furthermore, what opportunities and risks are still out there to consider?..

We are once again facing uncertain times when it comes to estate planning. Under current law, the federal estate tax exemption of $11.58 million in 2020 will be reduced to approximately $6 million per person, indexed for inflation, in 2026. The federal estate tax laws (exemption amount, tax rates, etc...

Even though the state and local tax (SALT) world is constantly bombarded with new developments, it is a rare occurrence that we witness the birth of an entirely new tax. Oregon provided the newest addition to the SALT family with the Corporate Activity Tax (CAT), which went into effect January 1, 2020. This tax will endure some growing pains over time, but here is what you need to know now. The CAT borrows elements from its sibling gross receipts taxes like the Ohio Commercial Activity Tax, Washington Business & Occupation Tax, and Nevada Commerce Tax, and it puts its own twists on things...

On August 8, 2020, President Trump signed an executive memorandum that directed Treasury to defer the withholding, deposit, and payment of certain payroll taxes through the end of the year. On August 28, Notice 2020-65 was released providing additional guidance for employers. Key Points Deferral applies only to 6.2% social security tax withholding on wages paid during the period of September 1, 2020, through December 31, 2020 Only employees who make less than $4,000 in pre-tax wages on a bi-weekly pay period-by-pay period basis are eligible Executive memorandum only defers the payment of certain payroll taxes – without further action any deferred amounts have to be repaid Employers are responsible for the repayment of the deferred taxes done ratably from January 1, 2021 to April 30, 2021 No penalties or interest will be assessed on the deferred amounts as long as they are repaid before May 1, 2021 Employers can make arrangement with employees on how they choose to collect the repaid amounts but generally it will be through doubling the social security tax withholding during the repayment period The notice does not state whether employers can opt out of deferring payroll taxes, however, prior to the notice release, Treasury Secretary Mnuchin indicated it will not be mandatory Takeaway Factoring in the additional guidance included in Notice 2020-65, we still strongly recommended clients do not consider implementing the deferral option at this time...

Economic nexus – a state’s ability to subject a business to tax when the business is not physically present in the state – has been a much-debated topic in state and local income/franchise taxes for more than 25 years. In the sales/use tax realm, the U.S. Supreme Court clearly stated since 1967 that physical presence was required for nexus, until it reversed course in 2018 with the Wayfair case to say that economic nexus is valid for sales/use tax, in addition to physical presence nexus...

It’s an ideal time to qualify for reduced property taxes on new and rehabilitated residential properties in certain Michigan communities, thanks to the recently enacted Public Act 3 of 2020 that amends an under-utilized property tax break known as Neighborhood Enterprise Zones. While the amendment itself is not that significant, it provides a good reason to look at this tax break in general to see if it could be beneficial. Neighborhood Enterprise Zones (“NEZs”) provide an incentive for residential development in economically-distressed communities in Michigan. This incentive varies depending on whether the development is new or a rehabilitation project, and on whether a rehab project is done in a historical building...

As the economic slowdown caused by COVID-19 drags on, many companies are facing extremely difficult decisions about how to stay afloat and keep their employees paid. Some may be tempted to use sales tax collected from customers to do so, instead of remitting that money to the government. We strongly discourage this approach. Consider that when a company withholds federal payroll taxes from an employee but does not remit them to the IRS, individuals responsible for making those remittances can be held personally liable for the unremitted tax...

Editor’s note: this is the second of two articles exploring the potential tax implications relating to residency Read the first one here. For owners of flow-through entities looking to sell their business, selling their ownership interest versus assets of the business is a significant decision with potential tax implications related to residency. While buyers usually prefer to buy assets, selling an ownership interest instead can be done in certain circumstances. In these instances, the owner is selling an intangible asset, and many states view this as being taxable only in the owner’s state of residency...