Western CPE Blog
Breaking tax and accounting news and analysis from the experts at Western CPE.
IRS Provides Broad Penalty Relief for Certain 2019, 2020 Returns
By: Today, the IRS announced that it is providing broad penalty relief for certain 2019 and 2020 individual and business returns. Penalty Relief Under Notice 2022-26, released August 24, 2022, relief is provided for taxpayers from certain failure to file penalties and certain international information return (IIR) penalties with respect to taxable years 2019 and 2020 returns that are filed on or before September 30, 2022. Additionally, the IRS is providing relief from certain information return penalties for 2019 returns that were filed on or before August 1, 2020, and with respect to taxable year 2020 returns that were filed on …
IRS Provides Broad Penalty Relief for Certain 2019, 2020 Returns Read More »
Congress demands answers from Rettig on IRS backlog
Remember the unprecedented IRS backlog and the ensuing chaos it created for tax pros and taxpayers alike? Of course you do, and it’s not yet a thing of the past. Crush It, Crush It Real Good A bipartisan, bicameral group of over 90 lawmakers in an August 15 letter demanded answers from the IRS concerning the agency’s ongoing backlog, which Commissioner Rettig has promised would be “crushed” by year’s end. During an April Senate Finance Committee hearing, Rettig told lawmakers that the IRS would return to a “healthy state” by the end of 2022. According to a subsequent National Taxpayer Advocate …
Congress demands answers from Rettig on IRS backlog Read More »
How New Tax Law Changes Affect Tax Professionals
By: Congress has enacted a reconciliation package containing several significant tax law changes, many of which will likely impact your clients. President Biden is expected to sign the legislation into law on Tuesday, August 16, 2022. Inflation Reduction Act The climate, healthcare, and tax reconciliation package (HR 5376) was previously named the Inflation Reduction Act (IRA) of 2022. However, during consideration on the Senate floor, the name “Inflation Reduction Act of 2022” was removed because the inclusion of the name violated the budget reconciliation rules being used to drive the bill through the Senate. The measure is now formally named “An …
How New Tax Law Changes Affect Tax Professionals Read More »
Senate Approves Inflation Reduction Act with Significant Tax Law Changes, IRS Funding Boost
If you weren’t tuned into the 15 hours of Senate floor proceedings known as “vote-a-rama” over the weekend (good for you), you may have missed that the upper chamber on August 7 approved along party lines the Inflation Reduction Act (IRA) of 2022 (HR 5376). The sweeping climate and healthcare bill contains significant tax law changes and a steep IRS funding boost. Although the IRA (that acronym will likely always feel weird, am I right?) contains several provisions originally seen in the much larger House-passed Build Back Better Act, I suppose Sharon Kreider’s suggested title revision to Congress of Build …
Top Democratic Senators Reach Agreement on Corporate Tax Reform, Carried Interest
Senate Majority Leader Chuck Schumer, D-N.Y., and Sen. Joe Manchin III, D-W.Va., have reached an agreement on a corporate tax reform proposal that would impose a corporate minimum tax rate of 15 percent, narrow the carried interest tax break, and boost IRS funding. The Inflation Reduction Act of 2022 (HR 5376) is expected to reach the Senate floor for a vote in the upper chamber by next week. Corporate Tax Reform Under current law, the statutory corporate tax rate is 21 percent. Democrats’ corporate alternative minimum tax (AMT) proposal would impose a 15 percent minimum tax (also being called …
Top Democratic Senators Reach Agreement on Corporate Tax Reform, Carried Interest Read More »
SSARS 25: 10 USEFUL PRO-TIPS
By: The AICPA Accounting and Review Services Committee recently issued Statement on Standards for Accounting and Review Services (SSARS) 25, Materiality in a Review of Financial Statements and Adverse Conclusions, effective for engagements performed in accordance with SSARS for periods ending on or after December 15, 2021. Early adoption was permitted.Let’s start with a summary of the revisions and conclude with some pro-tips to assist with your Review Engagements. Summary The revisions include:The revision of the definitions of the following terms in AR-C section 60 to be consistent with the definitions in Statements on Auditing Standards: financial statements, designated accounting standard-setter, general purpose …
CPE Done Differently: Western CPE releases its long-awaited brand revival
Bozeman, Mont., July 13, 2022 – Change is inevitable, especially in an industry focused on accounting, finance, and tax education. In an ever-changing world, tax practitioners, financial professionals, and CPAs must be prepared for constant developments from year to year; however, they are not the only ones who are constantly honing their craft. This week, Western CPE launched its new and improved website experience. Packed with unique features, the company is delighted to provide all industry professionals the continuing professional education (CPE) they need, tailored to their own learning style. Design and Content Manager Christy Jacobson explains how the company …
CPE Done Differently: Western CPE releases its long-awaited brand revival Read More »
OECD Tax Project Could Affect Government Credits From R&D to Low-Income Housing
By: Alex M. Parker
Most of the discussion surrounding the Organization for Economic Cooperation and Development’s (OECD) five-year-old international tax project has focused on difficulties with taxation in the digital economy, as well as tax avoidance by corporations in the tech sphere through valuable intangible assets. But increasingly, it is clear that the 15% global minimum tax which is a large part of its final agreement, signed onto by nearly 140 countries, will also have profound implications on how every government uses incentives and tax credits to boost their economy. The final plan, should it be implemented, won’t just affect how much countries spend …
OECD Tax Project Could Affect Government Credits From R&D to Low-Income Housing Read More »
California Passthrough Entities Should Consider Making PTET Payments
California passthrough entities such as partnerships, LLCs, and S-corporations can make an election to pay a passthrough entity elective tax (PTET) equal to 9.3% of its qualified net income. This state tax payment is a deduction on the federal tax return and passed through to the owners on Form K1. This bypasses the Schedule A $10,000 State and Local Tax deduction limit. The California K1 will be reporting the entire income. PTET Election If clients do not elect… For 2022, the entity will need to make a payment by June 15, 2022 in order to make this election. The payment …
California Passthrough Entities Should Consider Making PTET Payments Read More »
IRS Releases 2023 Inflation Adjusted Amounts for HSAs
On April 29, 2022, in Revenue Procedure 2022-24, the IRS announced the 2023 inflation-adjusted amounts for Health Savings Accounts (HSAs). The contribution limits are $3,850 for individuals for self-only coverage and $7,750 for individuals with family coverage starting on January 1, 2023. The Numbers This is a substantial increase over the 2021 limits: $200 from 2021 to 2022, whereas it was a $50 increase from 2020 to 2021 for self-only coverage; $450 from 2021 to 2022 whereas it was a $100 increase from 2020 to 2021 for family coverage; and Contribution limits are $3,650 for self-only coverage and $7,300 for …
IRS Releases 2023 Inflation Adjusted Amounts for HSAs Read More »
Corps Hope Safe Harbor Could Ease Compliance Hassle With New Global Minimum Tax
By: Alex M. Parker
More than 130 countries and jurisdictions last year agreed to a global minimum tax framework, ensuring that companies pay at least 15% in taxes on excess profits in all jurisdictions they operate in. It could be a tough requirement for global multinational corporations. But a safe harbor could ensure that taxpayers face minimal compliance requirements in most countries that have tax rates significantly above the 15% threshold, or who pass special domestic taxes matching the new international standard. According to several companies, tax practitioners and business groups who submitted comments to the OECD on April 13, a safe harbor could …
Corps Hope Safe Harbor Could Ease Compliance Hassle With New Global Minimum Tax Read More »
S Corporations: Designed for Small Business, Reporting Now Directed by the Big Players
By: On April 13, Western CPE’s TaxByte released “IRS Adds Eight New FAQs on Schedules K-2 and K-3 But Questions Linger.” Through examination of these new reporting requirements and the history of Subchapter S, reveals a distortion of the original objectives of this business form. What started out as a simple single tax entity is now governed by the most complex reporting needs of any shareholder. Schedules K-2 and K-3 reveal a “tail wagging the dog” approach that imposes inappropriate burdens on millions of closely-held businesses that have no reason to report, or even record, much of the requested information. History …
S Corporations: Designed for Small Business, Reporting Now Directed by the Big Players Read More »
New $1.5T Omnibus Signed, Boosting IRS Funding – Backlog Remedy Addressed?
TRENDING NEWSPresident Biden signed into law on March 15 a $1.5 trillion omnibus that provides the IRS with a six percent fiscal year (FY) 2022 funding boost and statutory direct-hire authority to address the agency’s ongoing backlog. The government spending bill, the Consolidated Appropriations Act, 2022, comes over five months past the start of the fiscal year after a congressional stalemate led Congress to extend FY 2021 funding levels several times via continuing resolutions to prevent a government shutdown. Omnibus Makes No Major Tax Law Changes The 2,741-page omnibus contains no major tax law changes (or extenders) despite recent …
New $1.5T Omnibus Signed, Boosting IRS Funding – Backlog Remedy Addressed? Read More »
California Tax Insights: A look at AB 150, SB 113, & Schedules K-2 & K-3
TRENDING NEWSOn February 15, the IRS stated their intention to provide certain additional transition relief for this year from the Schedule K-2 and K-3 reporting for certain domestic partnerships and S corporations with no foreign activities, foreign partners or shareholders, and without knowledge of partner or shareholder need for information on items of international relevance. For 2021, these qualifying domestic partnerships and S corporations will not have to file the new schedules.Due to the feedback the IRS received from the tax community, they decided to provide further aid and explanation. The community voiced concerns caused by several weeks of confusion and …
California Tax Insights: A look at AB 150, SB 113, & Schedules K-2 & K-3 Read More »
The Suggestion Box: The 2021 Tax Season
By: 
& 
& eTAX ALERT SERIES The Suggestion Box Welcome to The Suggestion Box: The 2021 Tax Season. With the startup of the 2021 tax return season, SharonKreider and the Western CPE team reached out to their experts to get their best tax season suggestions for the year. They are here to give you all the need-to-knows and advice to aid your return process with your clients. Today, we’re touching on Part 1 of our Suggestion Box eTax Alert Series. Make sure to stay tuned for new content, as the season continues. Encourage Clients to Create an IRS Online Account Encourage Clients to …
Stay Ahead This Tax Season
The 2021 tax season is officially here, come Monday. The IRS announced the nation’s tax season will start on Monday, January 24, 2022. With tax season, quickly on its way, here’s what you’ll need to know before they begin accepting and processing 2021 tax year returns and the obstacles that came with the pandemic. It’s never too early to get ahead. IMPORTANT DATES January 24 Start date for 2021 Individual Tax Return filers Start date for 2021 Individual Tax Return filers January 28 Earned Income Tax Credit Awareness Day to raise awareness of valuable tax credits available to many people …
What’s New with 2021 Form 1040?
You’ll want to take the time to review the “What’s New” Section of the Form 1040 Instruction before the 2021 tax season. Its lengthy changes will most likely need your attention before crunch time. The Instructions for the 2021 Form 1040 section on “What’s New” is two pages long. The two pages include 17 reminders on what has changed from 2020 to 2021. We talked about the changes in the update classes, but now it is time for you and your staff to review the new input forms that resulted from the changes. *Make sure you read thoroughly for some …
Your 2021 S Corporation Client Letter Needs a Change
Prepare to change your 2021 S Corporation Client Letter. Item D has been added to Part I of the 2021 Form 1120-S Schedule K-1 for use in reporting the corporation’s total number of shares for the beginning and end of the tax year. Ask your client for the share information now and look for the change on your input forms.Since no actual incorporation takes place, no shares are issued when an LLC elects to be taxed as an S corporation (S Corp). What goes on Item D? The instructions state that an entity without stock, such as an LLC, should …
Your 2021 S Corporation Client Letter Needs a Change Read More »
THE GIFT TAX RETURN: EXPLORING SECTION 529
By: Do your clients have a child or grandchild that they want to provide funds for post-secondary education? Making use of a Section 529 plan, they can give five years’ worth of gifts at once. The 2021 annual exemption from gift tax is $15,000, a $75,000 gift to a 529 plan can be made before December 31, and the donor can elect to treat the gift as being made 1/5 per year for five years. The 2022 Gift tax exemption is $16,000, so you can give an additional $5,000 in 2022 and make another five-year election. This eTax alert will show …
RMDS ARE BACK: THE RISKS OF A LAST MINUTE WITHDRAW
Clients had a break in 2020, they didn’t have to take Required Minimum Distributions (“RMDs”) from their retirement accounts. The RMDs come not just from IRAs but 403(b) arrangements, Keogh plans, and other profit-sharing plans. Failure to take the distribution can lead to a 50% penalty on the missed amount. IRA custodians are required to either calculate the RMD for customers by assuming the uniform table applies to them or offering to calculate a personalized distribution amount. Those requirements do not apply if the IRA is inherited, however. In this eTax Alert, we’ll talk about the return of RMD withholding, …
RMDS ARE BACK: THE RISKS OF A LAST MINUTE WITHDRAW Read More »