Internal Revenue Service | TaxConnections

02 Jan 2019

IRS Issues Guidance On Section 179 Expenses And Section 168(g) Depreciation Under Tax Cuts And Jobs Act

The Internal Revenue Service issued Revenue Procedure 2019-08 to provide guidance on deducting expenses under Section 179(a) and on deducting depreciation under Section 168(g). These rules, as amended by the Tax Cuts and Jobs Act (TCJA) in December 2017, generally apply to tax years beginning after 2017.

Section 179 allows taxpayers to deduct the cost of certain property as an expense when the property is placed in service. For tax years beginning after 2017, the TCJA increased the maximum Section 179 expense deduction from $500,000 to $1 million. The phase-out limit increased from $2 million to $2.5 million. These amounts are indexed for inflation for tax years beginning after 2018.

Written by IRS | Posted in Internal Revenue Service • IRS Section 179 Expenses

06 Nov 2018

IRS Large Business And International Report On The Examination Process

ISSUE ONE: LB&I EXAMINATION PROCESS

The Internal Revenue Service introduced the Large Business & International Examination Process (LEP) in 2016. Designed to provide an organizational approach for conducting efficient examinations from the first contact with the taxpayer through the final stages of issue resolution, LEP is described in IRS Publication 5125 (2-2016). See also IRM 4.46 LB&I Examination Process. Many aspects of LEP are working well; in particular, LEP has resulted in closer collaboration on the formulation and issuance of Information Document Requests (IDRs). The LB&I subgroup understands that the IRM is in the process of being revised to reflect the new issue-based “campaign” initiative and that additional changes will likely be made to LEP as LB&I gains experience with the campaign process.

Written by IRS | Posted in Internal Revenue Service

26 Oct 2018

What To Know About The IRS 1099-K Form

Venar Ayar- What To Know About The 1099-K

IRS Form 1099-K is a form used by the Internal Revenue Service to report certain transactions to improve voluntary tax payments and compliance. The form originated in 2008 as part of the Housing Assistance Tax Act, even though the document has nothing to do with housing at all. A 1099-K is required for those who received payments:

From payment card transactions (e.g., debit, credit or stored-value cards), and/or
In settlement of third-party payment network transactions above the minimum reporting thresholds of –
- gross payments that exceed $20,000, and
- more than 200 such transactions

Written by TaxConnections Admin | Posted in 1099-K Form • Internal Revenue Service

23 Oct 2018

Treasury, IRS Issue Proposed Regulations On New Opportunity Zone Tax Incentive

The Treasury Department and the Internal Revenue Service today issued proposed regulations and other published guidance for the new Opportunity Zone tax incentive.

Opportunity Zones, created by the 2017 Tax Cuts and Jobs Act, were designed to spur investment in distressed communities throughout the country through tax benefits. Under a nomination process completed in June, 8,761 communities in all 50 states, the District of Columbia and five U.S. territories were designated as qualified Opportunity Zones. Opportunity Zones retain their designation for 10 years. Investors may defer tax on almost any capital gain up to Dec. 31, 2026 by making an appropriate investment in a zone, making an election after December 21, 2017, and meeting other requirements. Read More

Written by IRS | Posted in Internal Revenue Service

03 Aug 2018

Retirement Savings Contributions Credits (Saver’s Credits)

You may be able to take a tax credit for making eligible contributions to your IRA or employer-sponsored retirement plan.

Who Is Eligible For The Credit?

You’re eligible for the credit if you’re:

Age 18 or older;
Not a full-time student; and
Not claimed as a dependent on another person’s return.

See the instructions for Form 8880, Credit for Qualified Retirement Savings Contributions, for the definition of a full-time student.

Amount Of The Credit

The amount of the credit is 50%, 20% or 10% of your retirement plan or IRA contributions up to $2,000 ($4,000 if married filing jointly), depending on your adjusted gross income (reported on your Form 1040 or 1040A). Use the chart below to calculate your credit.

Written by IRS | Posted in Internal Revenue Service • Retirement Savings Contributions

27 Jul 2018

Many Corporations Will Pay A Blended Federal Income Tax This Year Under The New Tax Reform Law

Many U.S. corporations elect to use a fiscal year end and not a calendar year end for federal income tax reporting purposes. Due to a provision in the recently enacted Tax Cuts and Jobs Act (TCJA), a corporation with a fiscal year that includes Jan. 1, 2018 will pay federal income tax using a blended tax rate and not the flat 21 percent tax rate under the TCJA that would generally apply to taxable years beginning after Dec. 31, 2017.

Corporations determine their federal income tax for fiscal years that include Jan. 1, 2018, by first calculating their tax for the entire taxable year using the tax rates in effect prior to TCJA and then calculating their tax using the new 21 percent rate, subsequently proportioning each tax amount based on the number of days in the taxable year when the different rates were in effect. The sum of these two amounts is the corporation’s federal income tax for the fiscal year.

The blended rate applies to all fiscal year corporations whose fiscal year includes Jan. 1, 2018. Fiscal year corporations that have already filed their federal income tax returns that do not reflect the blended rate may want to consider filing an amended return.

The federal sequester law remains in effect for the 2018 federal fiscal year. Corporations need to be aware of how this may affect their tax credits and refunds. Revised forms and instructions can be found on IRS.gov.

Written by IRS | Posted in Internal Revenue Service • Tax Cuts and Jobs Act

27 Jul 2018

How IRS Payment Plans Work

IRS Payment Plan

When it comes to setting up an IRS payment plan, there are a few options to choose from. In general, the type of arrangement you can obtain depends on the amount of taxes that you owe and how quickly you are able to pay. Let’s take a look at the different kinds of tax payment plans that are available through the IRS.

Individual Installment Agreement

This payment plan applies to individuals who owe $50,000 or less in income tax, interest, and penalties (combined). With an installment agreement, you can make regular monthly payments over time. Payments can be made through Direct Debit (from your bank account), check or money order, credit card (online or by phone), EFTPS (Electronic Federal Tax Payment System), payroll deduction (from your employer), or an Online Payment Agreement (OPA). When you set up an installment agreement, make sure you will be able to make the monthly payments without defaulting. Defaulting on your loan can not only hurt your credit, but it can also lead to your installment agreement being invalidated.

Written by Venar Ayar | Posted in Internal Revenue Service • Venar Ayar

20 Jul 2018

IRS FATCA Foreign Financial Institutions (FFI) Lists 314,027 Financial Institutions Worldwide

The Foreign Financial Institutions (FFI) List is issued by the IRS and includes all financial institutions, branches, direct reporting non-financial foreign entities, sponsored entities, and sponsored subsidiary branches that have submitted a registration and have been assigned a Global Intermediary Identification Number (GINN) at the time the list was compiled. The list is compiled on a monthly basis and published the first day of each month.

The Foreign Financial Institutions (FFI) list in its entirety along with the Global Intermediary Identification Number (GINN) can be accessed or downloaded in its entirety on the following page:

Written by IRS | Posted in FATCA Foreign Financial Institution List • Internal Revenue Service

17 Jul 2018

Private Pass-Through Foundation Rules And The 50 Percent Contribution Deduction

Contributions to a private nonoperating foundation may qualify for the benefit of the 50 percent contribution deduction limit, and donors may deduct the full value of appreciated property, if the private nonoperating foundation:

Distributes an amount equal in value to 100 percent of all contributions received in the tax year by the 15th day of the 3rd month after the close of its tax year,
Has no remaining undistributed income for the year, and
Distributes only qualifying distributions that are treated as distributions out of corpus.

Qualifying distributions cannot be made to:

An organization controlled directly or indirectly by the foundation or by one or more disqualified persons, or
A private foundation that is not an operating foundation.

Written by IRS | Posted in Internal Revenue Service • Passthrough Entities