PATH act | TaxConnections

11 Aug 2021

QIP Revisited: Five Years Of Qualified Improvement Property

Qualified Improvement Property (QIP) was introduced to the federal tax code via the PATH Act of December 2015. Initially, QIP was conceived as a vehicle by which base building assets might become eligible for bonus depreciation when an existing building was improved. In the last five years however, QIP has evolved into a core strategy for improvement work to commercial real estate.

As is the case with many tax strategies, QIP has a number of important details that must be kept in mind. Let us start with the definition, as outlined under the PATH Act:

Any improvement to an interior portion of a building which is nonresidential real property if the improvement is placed-in-service after the date the building was first placed-in-service by any taxpayer. Exclusions also exist for any work done to elevator, escalator equipment, enlargements of a building or work to structural members of a building.

Written by Bruce Johnson | Posted in Qualified Improvement Property (QIP)

19 Mar 2018

Mortgage Insurance Premiums For Taxpayers

Mortgage insurance in the simplest of terms is the backup plan for a lender. In the unfortunate event that the borrower is unable to repay the loan, the lender can cash in the mortgage premium and recover the losses. However, there is more to it than what meets the eye. Here are some more details of this rather intriguing insurance and why you should opt for it.

What Is It?

Statistics reveal that most home buyers pay less than 20% of the entire property cost as up front or commonly known as down payment. Read More

Written by Nanda Kumar | Posted in Adjusted Gross Income • Insurance • Mortgages • TaxConnections

31 Aug 2017

Start-Up Companies Are Now Receiving Their R&D Tax Credit Payroll Refund Checks

The Protecting Americans from Tax Hikes Act of 2015 (“PATH Act”) significantly enhanced the Research and Development Tax Credit Program (“RTCP”) on a myriad of levels by making the RTCP a permanent tax incentive within the Code and considerably restructured the program to: Read More

Written by Peter J. Scalise | Posted in Tax Credit

09 Feb 2017

AICPA Requests Administrative Guidance By Dept Of Treasury

The American Institute of Certified Public Accountants (hereinafter “AICPA”) has requested the Department of the Treasury and the Internal Revenue Service (hereinafter the “Service”) to issue some form of immediate administrative authority governing the enhanced R&D Tax Credit Program (hereinafter “RTCP”) in connection to qualifying Small Businesses and qualifying Start-Up Companies to accurately calculate the R&D Tax Credit from a quantitative perspective effective for tax years beginning on or after January 1, 2016.

Written by Peter J. Scalise | Posted in Small Business

20 Jan 2017

“Where’s My Refund?” – IRS Changes

So you get all your tax information together early and go to your preparer so you can file your tax return early and get the refund quickly. Not so fast. Certain refunds will be delayed and will not be released by the IRS until February 15. This is due to a provision in the PATH Act, enacted by Congress in 2015, prohibiting the IRS from releasing certain refunds prior to February 15. This provision takes effect this year. Note that the 15th is the release date, so it will take a few more days for you to receive the refund.

Written by John Stancil | Posted in IRS

17 Jan 2017

Trust Fund Recovery: Penalties & Pitfalls

I for one am glad that 2016 finally ended. Coming out of a contentious election with a boat load of vitriol thrown around, I don’t know about you, but I was swinging between the need for relief for it all to be over and the fear of who would take over the presidency and if it would go into capable hands. I am so glad tax season started so I can get to the business of preparing returns!

Written by Manasa Nadig | Posted in Payroll Taxes

29 Dec 2016

New Required Preparer Due Diligence: AOTC & Child Tax Credit

The addition of these two credits to the required due diligence of paid preparers in preparing a return that claims either or both was made by the PATH Act (P.L. 114-113, 12/18/15). The statutory language added at §6695(g) implied that regulations were needed. The IRS released draft Form 8867 and instructions in summer 2016, but did not release the regulations until 12/5/16. [TD 9799 (12/5/16) and REG 102952-16 (12/5/16)]

Written by Annette Nellen | Posted in Family Tax

02 Dec 2016

A Practical Guide To The Enhanced R&D Tax Credit Program For Eligible Small Businesses And Eligible Start-Ups

The Federal-Level Research and Development Tax Credit Program (hereinafter “RTCP” or “RTC”) was originally enacted into the Internal Revenue Code (hereinafter “the Code”) through the Economic Recovery Tax Act of 1981 as a temporary provision of the Code at a time when research and development jobs were significantly declining throughout the United States. Notably, the RTCP was introduced into the Code to encourage businesses to invest in significant research and development efforts with the high expectations that such an advantageous tax incentive program would facilitate in stimulating economic growth and investment throughout the United States and prevent further jobs from being outsourced to other countries.

Written by Peter J. Scalise | Posted in Small Business • Tax Credit • Tax Provision/Tax Reporting

30 Jun 2016

The Enhanced R&D Tax Credit Program Provides A True Path To Significant Tax Savings For Small Businesses

The Protecting Americans from Tax Hikes Act of 2015 (hereinafter the “PATH Act”) significantly enhanced the Federal-Level R&D Tax Credit Program (hereinafter “RTC Program”) under I.R.C. § 41 on a myriad of levels for both eligible “Small Businesses” and eligible “Start-Up Companies”. More specifically, the enhanced RTC Program has been considerably restructured for these aforementioned eligible companies to now:

Written by Peter J. Scalise | Posted in 2016 Tax Changes • 2016 Tax update

24 Dec 2015

PATH Act ITIN Renewal Requirements: All ITINs issued before 2013

On December 18^th, President Obama, signed H.R. 2029, the tax (the “Protecting Americans from Tax Hikes Act of 2015”) and spending bills (Consolidated Appropriations Act, 2016) to fund the government for its 2016 fiscal year.

The PATH Act ITIN renewal requirements: individuals who were issued Individual Taxpayer Identification Numbers (ITINs) before 2013 to renew their ITINs on a staggered schedule between 2017 and 2020 either in person before an IRS employee or a certified acceptance agent or by mail under procedures to be developed. Documentation proving identity, foreign status and residency is required for renewal. The Act also provides that an ITIN will expire if an individual fails to file a tax return for three consecutive years.

Similar rules apply to individuals residing outside the United States such as Canadians who applied for ITINS and file U.S. tax returns reporting their net rental income from U.S. real estate. It’s important to keep in mind that the

Written by Larry Stolberg, CPA, CA | Posted in Individual Taxpayer ID Numbers • ITIN • PATH Act • Tax Policy

23 Dec 2015

Rate Increase and Withholding of Tax on Dispositions for US Property Interests

An important tax update was made regarding the rate increase and withholding of tax on U.S. property dispositions. On December 18^th, President Obama, signed H.R. 2029, the tax (the “Protecting Americans from Tax Hikes Act of 2015”) and spending bills (Consolidated Appropriations Act, 2016) to fund the government for its 2016 fiscal year.

The December The Act increases the rate of withholding from dispositions of U.S. real property interests under §1445 from 10% to 15%, but remains at 10% for residences sold for less than $1 million.

The withholding exemption where the sale price is under $300,000US and the purchaser will acquire the property as their principal residence is still in effect.

Written by Larry Stolberg, CPA, CA | Posted in PATH Act • Tax Legislation • Tax Policy • Tax Updates

22 Dec 2015

The PATH Act Significantly Enhances The R&D Tax Credit Program

On December 18^th of 2015, President Obama signed into law a sweeping $1.14 trillion dollar funding bill that will keep the federal government operating through September 30^th of 2016. In connection to the tax aspects of this comprehensive and pivotal legislation, the Protecting Americans from Tax Hikes Act of 2015 (hereinafter the “PATH Act”) accomplished considerably more than the typical tax-extenders legislation passed in previous years and truly signifies a dynamic paradigm shift as the PATH Act makes permanent over twenty leading tax incentives while extending other tax incentives over either a five year period or a two year period.

In particular, the PATH Act meaningfully enhanced the R&D Tax Credit Program (hereinafter “RTC program”) on a myriad of levels. As an overview, the RTC program was initially added to the U.S. Internal Revenue Code (hereinafter the “Code”) in 1981 through the Economic Recovery Tax Act of 1981 as a temporary provision of the Code. The RTC program had most recently expired on December 31, 2014. A tremendous paradigm shift to the RTC program was made possible through the PATH Act which not only renewed the RTC retroactively for all of calendar year 2015 but most importantly made the RTC program permanent. In addition, the enhanced RTC program has been considerably restructured to: Read More

Written by Peter J. Scalise | Posted in Tax Legislation • Tax Policy • Tax Updates