On April 19, New York State passed a budget bill that included a Pass-Through Entity (PTE) tax election that impacts partnerships, limited liability companies treated as partnerships, and S-corporations.
As businesses have navigated the COVID-19 pandemic over the course of 2020, many were forced to shift to a remote workforce temporarily. As the pandemic continues, employers and employees have adjusted to this new way of working, and many companies are now considering shifting to this model permanently. This change can provide many benefits, including reduced overhead, increased communication, improved employee satisfaction, and reduced carbon footprint. However, there are impacts to risk exposure as well.
Have you heard the terms “Section 199A” or “QBI Deduction” this tax season and wondered what they meant, or whether they will impact your taxes? You’re not alone.
The Tax Cuts and Jobs Act (TCJA) created a new tax deduction for business owners and others, called the Section 199A Qualified Business Income (QBI) Deduction. Since its release, there has been much confusion about the rules of this deduction, even in the tax world. In August, the IRS and the Department of the Treasury released some additional guidance, and in October, held a public hearing to field comments and questions.
On January 18, 2019, The IRS and the Treasury issued final regulations to clarify and update the proposed rules. Here’s a high-level overview:
Almost all businesses have employees who incur expenses while on the job—everything from office supplies, to travel and business dinners. But not all business owners are sure how to best handle the reimbursement of these expenses. We frequently get questions from our clients on this subject—should reimbursements be included in the employee's income? Are they tax deductible?
In order for an expense to be tax deductible to the business, and received tax-free by the employee, it must be reimbursed under an "accountable plan".