This semiannual update on current developments in the area of individual taxation includes a number of cases on material participation, hobby losses, charitable contributions, the Sec. 199A regulations, and several other important areas.
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Individuals
Educating students for expanded financial planning careers
The AICPA is integrating personal financial planning into university-level curriculum in a manner that would help prepare prospective CPA candidates to qualify for the Personal Financial Specialist credential shortly after obtaining their CPA license.
Legal and professional fees in divorce case not deductible as business expenses
Legal and professional fees incurred in a divorce action were nondeductible personal expenses since the “origin of the claim” in the divorce action was not related to the taxpayer’s trade or business.
Qualified business income deduction regs. and other guidance issued
The package includes final regulations, guidance on how to calculate W-2 wages, a safe-harbor rule for rental real estate businesses, and new proposed rules on the treatment of previously suspended losses.
Some individual taxpayers get relief from underpayment penalty
The relief applies to individuals whose tax withheld and estimated tax payments equal at least 85% of the tax shown on their 2018 tax return.
Divorce post-TCJA: unexpected consequences
This article discusses changes that might affect clients that are divorced, are in the process of divorcing, or that have prenuptial or post-nuptial agreements.
IRS announces Free File launch
The IRS announced that its Free File program, which provides free electronic filing options to moderate-income taxpayers, opened Jan. 11 and will operate through Oct. 15.
The TCJA’s effect on future R&D tax credit planning
This article discusses the modifications made to Sec. 174 and Sec. 41, which will affect taxpayers’ R&D tax credit claims for tax years after Dec. 31, 2021.
IRS to improve management of its existing tip agreements
A TIGTA audit report examined tip-related tax noncompliance and made nine recommendations to the IRS.
Tax credits in bankruptcy
Tax refunds that count as “public assistance benefits” may be exempt in bankruptcy.
Certain moving expenses incurred in 2017 not subject to withholding and employment tax in 2018
Employer reimbursements made in 2018 of qualified moving expenses incurred prior to 2018 in connection with a move that occurred prior to Jan. 1, 2018, may be excluded from employees’ wages and gross income despite the suspension of the exclusion for tax years 2018 through 2025.
Modification of variable prepaid forward contracts triggers gain realization
A Second Circuit decision may affect the analysis
of whether the modification of a derivative triggers gain or loss.
Personal exemption rules clarified for 2018 tax year health-related provisions
IRS guidance clarifies what it means to claim a personal exemption deduction.
IRS to table changes planned for Form W-4 until 2020
As a result of feedback from payroll and tax professionals, the IRS will postpone the extensive changes it had planned to the 2019 Form W-4.
Economic benefits of life insurance premium payments are not includible in income
Economic benefits from an S corporation’s payment
of a premium on a life insurance policy were not includible in the shareholder/employee’s income.
Sec. 199A: Questions and answers
Jeff Bilsky, CPA, senior practice leader for BDO’s national partnership taxation group, sat down recently for a question-and-answer session on guidance that has been issued on the Sec. 199A qualified business income deduction.
2019 standard mileage rates announced
The IRS released guidance on the standard mileage rate for business, medical and certain moving expenses incurred in 2019.
IRS explains disallowance of qualified transportation fringe benefits for parking
The IRS issued guidance outlining how to determine the amount of parking expense that is nondeductible under Sec. 274(a)(4) when employers provide parking for their employees.
Initial guidance issued on Sec. 83(i) deferral election for private company equity grants
The IRS issued initial guidance on the application of Sec. 83(i), which allows certain employees to defer recognition of income attributable to the receipt or vesting of qualified stock.
Service businesses that qualify for the 20% QBI deduction
This article discusses the limitations that apply to
specified service trades or businesses.
TAX PRACTICE MANAGEMENT
2025 tax software survey
AICPA members in tax practice assess how their return preparation software performed during tax season and offer insights into their procedures.
