The basics of the expanded child tax credit

Under the new tax reform bill, the Child Tax Credit was raised to $2,000 (increased $1,000 from 2017) per qualifying child. While the criteria for qualifying a child for this credit have not changed from 2017, some of the other rules are different going forward to 2018. Let’s look at how this credit is changing …

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The Uniform Guidance and required policies

When the Uniform Guidance was issued, it brought with it several changes for entities that receive federal awards. The purpose of the Uniform Guidance was to reduce the risk of fraud, waste and abuse as well as to streamline the requirements for several different types of entities that receive federal funds. The Office of Management …

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AZ Prop 206 and accounting for unused vacation, sick pay

In November 2016, Prop 206, the Fair Wages and Healthy Families Act was approved. The Act established a new state minimum wage effective January 1, 2017 and entitled employees to accrued earned paid sick time beginning July 1, 2017. This newly required accrued sick time may have an impact on your year-end accruals. A few …

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Changes to net operating losses under tax reform

The tax law on net operating losses (NOLs) has changed with the new Tax Cuts and Jobs Act that was signed into law on December 22, 2017. The “old law” stated that an NOL is carried back two years and then carried forward 20 years. According to the “new law,” any net operating loss that …

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Kiddie tax rules revamped under tax reform

Tax professionals are busy scrutinizing the Tax Cuts and Jobs Act (TCJA) and discussing many of the important changes with their clients. One significant but rarely discussed provision of the new bill is the revamp of the kiddie tax rules. Kiddie tax applies to the special rules on net unearned income of children under the …

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Standard deduction, personal exemptions, new tax law

One of the major changes in the tax reform bill is the changes made to the standard deduction and personal exemptions. This will affect a vast majority of taxpayers, some in a positive way, others not so much. The final version of the GOP Tax bill retains a proposed standard deduction and personal exemption into …

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Plan document: the summary plan description

All 401(k) Plans have a plan document which contains a comprehensive detail of all the rules surrounding the Plan. This plan document can be lengthy and overwhelming and therefore, 401(k) Plans also have a Summary Plan Description (“SPD”) document. The SPD is a concise summary of the Plan’s key features, some of which include the …

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What happened to my 263A (A)djustment?

First, let us explain IRC Section 263A since most people (non-accountants) probably have no idea what I am talking about, because it is something their CPA does behind the scenes and is often hard to explain. 263A requires certain costs that are normally expensed to now be capitalized as part of inventory for tax purposes. …

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New corporate tax rate under tax reform law

One of the major changes in the new tax law is the slashing of the corporate tax rate. Previously, corporations were subject to four narrow tax brackets that ranged from 15% to 35%. As of January 1, 2018, the old rates were replaced by a flat rate of 21%. Even with lower individual tax rates …

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Charitable donations deduction limitation

As you know, there are potential tax benefits for your donations to qualifying charitable organizations, and the tax reform bill is not making any major changes to that. There is, however, one taxpayer-friendly adjustment in the tax bill regarding cash donations. When making donations to public charities, your allowable tax deduction is limited to a …

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