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IRS Updates On Tax Credit Helping Businesses To Hire

IRS Updates On Tax Credit Helping Businesses To Hire

IRS updates Information on tax credit helping businesses to hire certain categories of workers.

WASHINGTON — The IRS updated information on the Work Opportunity Tax Credit (WOTC), available to employers that hire designated categories of workers who face significant barriers to employment. For employers facing a tight job market, the WOTC may be able to help.

Today’s updates include information on the pre-screening and certification process. To satisfy the requirement to pre-screen a job applicant, on or before the day a job offer is made, a pre-screening notice (Form 8850, Pre-Screening Notice and Certification Request for the Work Opportunity Credit) must be completed by the job applicant and the employer.

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White House Fact Sheet On Student Loan Relief

Student Loan Relief Program

President Biden Announces Student Loan Relief for Borrowers Who Need It Most

A three-part plan delivers on President Biden’s promise to cancel $10,000 of student debt for low- to middle-income borrowers

President Biden believes that a post-high school education should be a ticket to a middle-class life, but for too many, the cost of borrowing for college is a lifelong burden that deprives them of that opportunity. During the campaign, he promised to provide student debt relief. Today, the Biden Administration is following through on that promise and providing families breathing room as they prepare to start re-paying loans after the economic crisis brought on by the pandemic.

Since 1980, the total cost of both four-year public and four-year private college has nearly tripled, even after accounting for inflation. Federal support has not kept up: Pell Grants once covered nearly 80 percent of the cost of a four-year public college degree for students from working families, but now only cover a third. That has left many students from low- and middle-income families with no choice but to borrow if they want to get a degree. According to a Department of Education analysis, the typical undergraduate student with loans now graduates with nearly $25,000 in debt.

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IRS Announces Interest Rate Increases For Fourth Quarter Of 2022; 6% Rate Applies To Most Taxpayers Starting Oct. 1

IRS Announces Interest Rate Increases For Fourth Quarter Of 2022; 6% Rate Applies To Most Taxpayers Starting Oct. 1

WASHINGTON — The Internal Revenue Service announced that interest rates will increase for the calendar quarter beginning October 1, 2022.

For individuals, the rate for overpayments and underpayments will be 6% per year, compounded daily, up from 5% for the quarter that began on July 1. Here is a complete list of the new rates:

  • 6% for overpayments (5% for corporations). (payments made in excess of the amount owed)
  • 3.5% for the portion of a corporate overpayment exceeding $10,000.
  • 6% for underpayments. (taxes owed but not fully paid)
  • 8% for large corporate underpayments.

Under the Internal Revenue Code, the rate of interest is determined on a quarterly basis. For taxpayers other than corporations, the overpayment and underpayment rate is the federal short-term rate plus 3 percentage points.

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You Are Invited To A Freeman Law Legal And Tax Update Webinar (Complimentary With 1 Hour Free CPE Credit)

Free Webinar On Tax Legal Update With CPE Credit

Freeman Law Legal and Tax Update Webinar

Date: Tuesday, August 30th, 2022

Start Time: 11:00 am- 12:00pm  Central Time (US and Canada)

Credit: 1 hour of CPE or CE (For CE Credit: PTIN and your  name must be entered exactly how you have it listed with the IRS)

Cost: Free

Click This Link To Register For Legal Tax Webinar

Join this complimentary legal update webinar as Freeman Law Attorneys discuss important developments and bring you up to speed on current initiatives. Many businesses are still facing unprecedented challenges, and we are here to provide insights.

During this information-filled webinar, the Freeman Law Legal team will cover:

  • “A Look-Back at U.S. Tax Court Opinions April 1-July 22, 2022”
    -Cory D. Halliburton

United States Senate Committee On Finance: Present Law And Background Relating To Tax Incentives On Real Estate

US. Senate Committee On Finance - Tax Incentives On Real Estate

Table Of Contents (57 Page Downloadable Publication)

INTRODUCTION ……………………………………………………. 1
I. TAX INCENTIVES FOR HOMEOWNERSHIP…………………………………………………… 2
A. Home Mortgage Interest Deduction ………………………….. 2
B. Deduction for Real Property Taxes………………………….     5
C. Exclusion of Gain from Sale of a Principal Residence ……… 7
D. Tax Exempt Bonds for Owner-Occupied Housing……………………………………………………………….. 8
E. Other Incentives………………………………………………… 12
1. Qualified first-time homebuyer distribution from an individual retirement plan…………………………………………………….. 12
2. Employer-sponsored retirement plan loans ……………….. 13
3. Exclusion from income of certain housing allowances and related deductions ………………………………………………………….. 15
4. Exclusion from gross income of discharge of qualified principal residence indebtedness……………………………………………..17
5. Treatment of tenant-stockholders of cooperative housing corporations…………………………………………………………. 19
II. TAX INCENTIVES FOR RENTAL HOUSING ………………….. 21
A. Low-Income Housing Tax Credit……………………………….21
B. Rehabilitation Tax Credit………………………………………..25
C. Tax-Exempt Bond Financing Residential Rental Property….27
D. Accelerated Depreciation for Residential Rental Property…28
E. Passive Activity Loss Rules and Special Rental Real Estate Rules…………………………………………………………………. 35
III. DATA AND ANALYSIS RELATED TO TAX INCENTIVES FOR
HOMEOWNERSHIP ……………………………………………….. 37
IV. DATA AND ANALYSIS RELATED TO TAX INCENTIVES FOR RENTAL
HOUSING……………………………………………………………. 47

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Joint Committee On Taxation Confirms: Tax Costs Exponentially Outweigh Benefits

New Analysis Shows Outsized Tax Burden Over Benefit For Vast Majority Of Americans.

Washington, D.C.–The nonpartisan Joint Committee on Taxation (JCT) has issued an analysis of effects of the reckless tax-and-spend bill on taxpayers in each income category.

The new analysis shows that the burden of the bill’s tax increases on lower- and middle-income Americans is so great, any supposed benefits from the temporary premium credits only outweigh the tax hits for a small sliver of the population.  Even for the small number of people would do receive a slight benefit, significantly larger portions of American taxpayers in each income category would still face the burden of a tax increase.

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Inflation Reduction Act 2022: Winners And Losers

Inflation Reduction Act 2022: Winners And Losers

MYTH vs FACT: Tax Title of the “Inflation Reduction Act of 2022”
Democrats claim the latest version of their tax-and-spend bill, the mislabeled “Inflation Reduction Act of 2022,” will ensure the wealthiest Americans and corporations pay their “fair share” by closing tax loopholes and boosting IRS funding, all without raising taxes on anyone making less than $400,000 per year. However, analyses from nonpartisan experts show the legislation would raise taxes on low- and middle-income Americans during a period
of declining GDP and high inflation; raise taxes on manufacturers, exacerbating supply-chain disruptions, and costing U.S. jobs and investment; and do little to nothing to lower inflation.

“The more this bill is analyzed by impartial experts, the more we can see Democrats are trying to sell the American people a bill of goods,” said U.S. Senate Finance Committee Ranking Member Mike Crapo. “Non-partisan analysts are confirming this bill raises taxes on the middle class, raises taxes on manufacturers, and produces no
meaningful deficit reduction when gimmicks are removed and the full cost is accounted for.”

IRS FUNDING

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More Taxes, More Spending, Higher Prices, And An Army of IRS Agents

More Taxes, More Spending, Higher Prices, And An Army of IRS Agents

Washington, D.C.–U.S. Senator Mike Crapo (R-Idaho), Ranking Member of the Senate Finance Committee, delivered remarks on the Democrats’ reckless tax-and-spending bill, outlining what Americans can expect from the mislabeled Inflation Reduction Act of 2022: more taxes, more spending, higher prices, and an army of IRS auditors.

“It’s too many taxes, too much spending, too big of a burden on American people across all income categories.” 

To watch Crapo’s full remarks, click HERE or the image above. 

On the state of the economy:  

The nonpartisan Penn Wharton Budget Model says the “Inflation Reduction Act” will, if anything, raise inflation in the first few years, with a small and insignificant negative effect later in this decade. That same model concludes that there is “low confidence that the legislation will have any impact on inflation.” 

But it does have an impact on all of us and our economy.  

The bill does nothing to bring the economy out of stagnation and recession.  Rather, the “Inflation Reduction Act of 2022” gives us higher taxes, more spending, higher prices, and an army of IRS agents.  

On tax hikes:  

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Signs Of Identity Theft Tax Pros Should Watch Out For

Signs Of Identity Theft Tax Pros Should Watch Out For

With identity thieves continuing to target the tax community, Internal Revenue Service Security Summit partners today urged tax professionals to learn the signs of data theft so they can react quickly to protect clients.

The IRS, state tax agencies and the tax industry – working together as the Security Summit – reminded tax professionals that they should contact the IRS immediately when there’s an identity theft issue while also contacting insurance or cybersecurity experts to assist them with determining the cause and extent of the loss.

“Tax pros must be vigilant to protect their systems from identity thieves who continue to look for ways to steal data,” said IRS Commissioner Chuck Rettig. “Practitioners can take simple steps to remain on the lookout for signs of data and identity theft. It’s critical for tax pros to watch out for these details and to quickly take action when tell-tale signs emerge. This can be critical to protect their business as well as their clients against identity theft.”

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The Correct IRS Standard Mileage Rates For Tax Purposes

Mileage Tax Rates

The IRS raised the Standard Mileage Rate TWICE in 2022.  One raise in January 2022 and another raise in July 2022. This means there are two sets of computations with one rate covering January through June 2022; and second IRS Standard Mileage Rates  covering July through December 2022.

The IRS also posted a different IRS Standard Mileage Rate for the full year 2021 as you can see at the chart below.

The IRS also posted a different IRS Standard Mileage Rate for the full year 2020 as you can see at the chart below.

It is important to note that you must properly document your mileage to receive full credit for business travel, medical/moving and charitable work.

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IRS States Some Nonresidents With U.S. Assets Must File Estate Tax Returns

Some Nonresidents with U.S. Assets Must File Estate Tax Returns

Certain deceased nonresidents who were not citizens of the United States are subject to U.S. estate taxation with respect to their U.S.-situated assets. For estate tax purposes, a citizen of a U.S. possession is not a U.S. citizen.

U.S.-situated assets that are subject to estate tax include, for example:

  • Real estate located in the U.S.,
  • Tangible personal property (excluding some art), and
  • Stock of corporations organized in or under U.S. law, even if the nonresident held the certificates abroad or registered the certificates in the name of a nominee.

Examples of property treated as situated outside the U.S., and therefore not subject to the U.S. estate tax, include certain deposits and debt obligations described in Section 871(g)-(i), bank accounts deposited with a foreign branch of a domestic commercial banking business, and proceeds of life insurance on the life of a nonresident who is not a U.S. citizen.

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Joint Committee On Taxation: Overview Of The Federal Tax System As In Effect For 2022

Joint Committee On Taxation

This document, 1 prepared by the staff of the Joint Committee on Taxation (“Joint Committee staff”), provides a summary of the present-law Federal tax system as in effect for 2022.

The current Federal tax system has four main elements: (1) an income tax on individuals, estates, trusts, and corporations (which consists of both a “regular” income tax and, in the case of
individuals, an alternative minimum tax);2 (2) payroll taxes on wages (and corresponding taxes on self-employment income) to finance certain social insurance programs; (3) estate, gift, and
generation-skipping transfer taxes; and (4) excise taxes on selected goods and services. This document provides a broad overview of each of these elements.

Several aspects of the Internal Revenue Code of 1986 (the “Code”), are subject to change over time. For example, some dollar amounts and income thresholds are indexed for inflation, including the standard deduction, tax rate brackets, and the annual gift tax exclusion. In general, the Internal Revenue Service (“IRS”) adjusts these numbers annually and publishes the inflation adjusted amounts in effect for taxable years beginning in a calendar year before the beginning of such calendar year. Where applicable, this document generally includes dollar amounts in effect for 20223 and notes whether dollar amounts are indexed for inflation. 4

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