Archive for 'mike grinnan cpa'

Tax Update: How Do I Write Off Baseball Season Tickets to My Business?

GrinnanMikeCPA

 

 

J. Michael Grinnan, CPA.CITP
Certified Public Accountant
9900 Corporate Campus Drive, Suite 3000
Louisville, KY 40223
Office 502-657-6333

Email Mike@JMGCPA.com

Website www.JMGCPA.com

 
Tax Update: How Do I Write Off Baseball Season Tickets to My Business?

Code Sec. 162 permits a business to deduct its ordinary and necessary expenses for carrying on the business. However, Code Sec. 274 restricts the deduction of entertainment expenses incurred for business by disallowing expenses of entertainment activities and entertainment facilities. Many expenses are totally disallowed; other amounts, if allowed under Code Sec. 274, are limited to 50 percent of the expense.

The income tax regulations define entertainment as any activity of a type generally considered to be entertainment, amusement, or recreation, such as entertaining at night clubs, lounges, theaters, country clubs, golf and athletic clubs, and sports events, as well as hunting, fishing, vacation and similar trips. There are special rules for the costs of…
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Tax Update: Business Meals and Entertainment – How to Maximize Tax Deductions

GrinnanMikeCPA

 

 

J. Michael Grinnan, CPA.CITP
Certified Public Accountant
9900 Corporate Campus Drive, Suite 3000
Louisville, KY 40223
Office 502-657-6333

Email Mike@JMGCPA.com

Website www.JMGCPA.com

 
Tax Update: Business Meals and Entertainment – How to Maximize Tax Deductions

Many businesses consider the occasional wining and dining of customers and clients just to stay in touch with them to be a necessary cost of doing business. The same goes for taking business associates or even employees out to lunch once in a while after an especially tough assignment has been completed successfully. It’s easy to think of these entertainment costs as deductible business expenses, but they may not be. As a general rule, meals and entertainment are deductible as a business expense only if …
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Congress Returns for Year-End Tax Legislation Push

Congress Returns for Year-End Tax Legislation Push

Year-end 2016 is expected to bring a rush of tax-related legislation in Congress. Lawmakers will be up against a December 31 deadline to renew some expiring tax incentives and possibly pass new tax breaks for individuals and businesses. The year may end with what is often called a “Christmas Tree bill,” a bill that includes a variety of tax and other provisions.

Note: At the time this article was posted, the results of the November 8 presidential election was not yet known. That outcome will shape tax legislation in 2017 and beyond. 

Tax breaks for individuals

In December 2015, many popular but temporary tax incentives for individuals were scheduled to expire at year-end. Congress renewed or made permanent most of these tax breaks in the Protecting Americans from Tax Hikes Act (PATH Act). However, some incentives were not included in the PATH Act and these are up for renewal, or possibly being made permanent, this December. They include the Code Sec. 25C residential energy credit (for energy-efficient improvements to homes) and the popular above-the-line deduction for higher education tuition and fees.

Tax breaks for businesses

The PATH Act also extended, and in some cases made permanent, many tax incentives for businesses. Some incentives, however, were not included in the PATH Act and are expected to come up for renewal this December. They include targeted incentives for film and television productions, Native American employment, the mining industry, railroads, and motorsports complexes. Along with these, some special tax breaks for alternative fuels are scheduled to expire at year-end. 

More proposals

Along with the incentives already described, some stand-alone tax bills are expected to come to votes in Congress before year-end. The bills, if passed, impact individuals, small businesses, farmers, and tax administration. They include:

  • The Support Small Business R&D Bill, which would expand knowledge resources available to startups and small businesses in connection with their using the research and development (R&D) tax credit.
  • The Restraining Excessive Seizure of Property through Exploitation of Civil Asset Forfeiture Tools (RESPECT) Bill, which would limit the IRS’s civil asset forfeiture authority (a companion bill has already passed the House).
  • The Middle-Income Housing Tax Credit (MIHTC) Bill of 2016, which would provide tax credits to encourage development of affordable housing
  • The Retirement Enhancement and Savings Bill of 2016, which expands tax incentives for small employers to create retirement savings plans and repeals the maximum age for contributions to traditional IRAs.
  • The Louisiana Flood and Storm Victims Devastation Act, which provides emergency tax relief for persons affected by severe storms and flooding in Louisiana.
  • The Farm Risk Abatement and Mitigation Election (FRAME) Act, which authorizes agricultural producers to establish and contribute to tax-exempt farm risk management accounts.

Any or all of these bills, and others, could be part of a year-end tax package. Our office will keep you posted of developments.

 

GrinnanMikeCPA

 

 

J. Michael Grinnan, CPA.CITP
Certified Public Accountant
9900 Corporate Campus Drive, Suite 3000
Louisville, KY 40223
Office 502-657-6333

Email Mike@JMGCPA.com

Website www.JMGCPA.com

 

Tax Update for Real Estate Investors from my CPA

POST Election Congress Grapples with Extenders as Lawmakers Plan for 2015

The results of the mid-term elections create a new dynamic in Congress with Republicans poised to take control of both the House and Senate in January. Prospects for tax reform may have brightened for 2015. In the meantime, the lame-duck Congress must deal with some urgent tax bills, most notably the tax extenders.

Expired tax breaks

As the 2015 filing season grows closer, lawmakers are under pressure to renew a package of expired tax incentives, known as tax extenders. There are more than 50 expired extenders that impact individuals and businesses. For individuals, some of the most far-reaching are the above-the-line deduction for higher education expenses, state and local sales tax deduction, mortgage debt forgiveness, deduction for mortgage insurance premiums, credit for energy improvements to personal residences, and the teachers’ classroom expense deduction. For businesses, the expired incentives include the research tax credit, special expensing rules for film and television productions, bonus depreciation, enhanced small business expensing, incentives to encourage production of wind energy and alternative fuels, and many more. All of these incentives expired after December 31, 2013. That means taxpayers cannot claim them on their 2014 returns filed in 2015 unless the incentives are extended.

Many Congressional staffers and Hill observers predict that lawmakers will renew the extenders in December. A vote could come in the House and Senate before December 20. A comprehensive extenders bill, the EXPIRE Act, is pending in the Senate. A similar bill, however, has not moved in the House. Instead, the House voted to extend some but not all of the extenders. Before year-end, the Senate could approve the EXPIRE Act and send the bill to the House. The Congressional Budget Office estimates that extending all of the expired provisions would cost $94 billion over two years (reflecting a retroactive extension to January 1, 2014 and an extension through the end of 2015). Our office will keep you posted of developments as tax filing season approaches.

The IRS has cautioned that the longer Congress waits to renew the extenders the greater the likelihood that the start of the 2015 filing season will be delayed. The IRS’s return processing systems are programmed for the current tax laws. The IRS must update its return processing systems for any changes that lawmakers make to the tax laws, such as renewing the extenders. Late legislation in the past has delayed the start of the filing season by around two weeks.

Looking ahead

When the new Congress meets in January, Republicans will have majorities in the House and in the Senate. GOP leaders have started to outline some of their priorities for 2015, including tax-related issues.

Tax reform. Rep. Paul Ryan, R-Wisc., who will serve as chair of the House Ways and Means Committee, has indicated his interest in tax reform, but so far has not provided any details. Ryan’s counterpart in the Senate, Sen. Orrin Hatch, R-Utah, who will serve as chair of the Senate Finance Committee, has also expressed support for tax reform. President Obama repeated his proposal to reduce the corporate tax rate in exchange for the elimination of some unspecified business tax breaks. Whether any tax reform proposals will gain traction in 2015 is unclear.

Affordable Care Act. Shortly after the elections, Hatch said he will propose an alternative to the Affordable Care Act (ACA) as well as bills to repeal parts of the ACA, such as the medical device excise tax. House Speaker John Boehner, R-Ohio, added that the GOP-controlled House will move to repeal the ACA in 2015.

Permanent extenders. Any renewal of the extenders will be temporary, carrying a likely expiration date of December 31, 2015. Lawmakers are expected to take a close look whether to make permanent some of the extenders and allow others to expire after 2015. Good candidates for a permanent extension are the state and local sales tax deduction, the higher education tuition deduction, enhanced small business expensing, and the research tax credit. One drawback, however, is the cost of making these incentives permanent. Many lawmakers will want to offset the cost. Negotiations over the long-term fate of the extenders are likely to be contentious as taxpayers seek to preserve their special tax breaks.

Corporate profits. In 2004, lawmakers agreed to a temporary repatriation tax holiday that allowed businesses to repatriate foreign profits at lower tax levels. Similar legislation is expected to be introduced in the new Congress. Again, negotiations will be intense as some lawmakers would seek to offset the cost of a repatriation tax holiday.

If you have any questions about the lame-duck Congress and the prospect for tax legislation in the new Congress, please contact our office. Keep in mind that as 2014 draws to a close, so does the time in which to make possible tax savings moves. Renewal of some or all of the extenders could impact your year-end tax planning.


If and only to the extent that this publication contains contributions from tax professionals who are subject to the rules of professional conduct set forth in Circular 230, as promulgated by the United States Department of the Treasury, the publisher, on behalf of those contributors, hereby states that any U.S. federal tax advice that is contained in such contributions was not intended or written to be used by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer by the Internal Revenue Service, and it cannot be used by any taxpayer for such purpose.
 
 
GrinnanMikeCPA
 
 
 
 
J. Michael Grinnan, CPA.CITP
Certified Public Accountant
9900 Corporate Campus Drive, Suite 3000
Louisville, KY 40223
Office 502-657-6333
Fax 502-657-6334
Email Mike@JMGCPA.com