State and Local Tax Deduction Limit
In Revenue Ruling 2019-11, posted on IRS.gov, the IRS provided four examples illustrating how the long-standing tax benefit rule interacts with the new SALT limit to determine the portion of any state or local tax refund that must be included on the taxpayer’s federal income tax return. The IRS new state and local tax deduction limit... Read More
The Charitable Contribution Deduction
Section 170(a) provides, subject to certain limitations, a deduction for any charitable contribution, as defined in § 170(c), payment of which is made within the taxable year. A charitable contribution is a donation or gift to, or for the use of, a qualified organization. Moreover, it is voluntary and is made without getting, or expecting... Read More
IRS Audit Statute of Limitations
The Internal Revenue Service (IRS) makes every effort to examine tax returns as soon as possible after they are filed. Moreover, an IRS audit can take time to complete, but the IRS cannot extend the audit indefinitely. To ensure timely tax examinations, Congress has set deadlines for assessing taxes and making refunds or credit of... Read More
Does My Business Qualify for the Employee Retention Credit?
What is the Employee Retention Credit? The Employee Retention Credit is a fully refundable tax credit for employers equal to 50 percent of qualified wages that Eligible Employers pay their employees. This Employee Retention Credit applies to qualified wages paid after March 12, 2020, and before January 1, 2021. The maximum amount of qualified wages taken into... Read More
EDD Statute of Limitations for Collections
The Tax Branch (TB) of the Employment Development Department (EDD) administers the collection, accounting, and auditing functions of California’s payroll tax program. If a business owes an EDD Tax Liability, the EDD statute of limitations for collection is important to analyze. Moreover, the program consists of Unemployment Insurance and Employment Training Tax, which are employer... Read More
California Sales Tax Nexus
How does a business know if it has a California sales tax nexus? Even though use tax is owed by consumers, RTC section 6203 requires retailers who are “engaged in business in this state” to collect the California use tax owed on their sales to California consumers and remit the tax directly to the CDTFA.... Read More
Does Bankruptcy Extend the IRS Statute of Limitations?
If you have filed a bankruptcy, your IRS statute of limitations may be affected. Most people who are considering bankruptcy are doing so for a fresh start. The IRS also offers the Offer in Compromise as a fresh start for those who qualify. However, what people may not realize is that filing a bankruptcy petition... Read More
Is Debt Discharge Income Taxable?
Debt exists where you borrow money and are legally obligated to repay a fixed or determinable amount at a future date. You may be personally liable for a debt or may own a property that’s subject to a debt. The IRS audits issues such as debt discharge income. If you have received an IRS audit... Read More
What is an IRS Audit Reconsideration?
Have you received a notice from the IRS saying your tax return was audited (or the IRS created a return for you) and you owe taxes, and you disagree with the tax the IRS says you owe? The IRS typically mails an audit report (sometimes called an examination report) to you within a few weeks after conducting... Read More
Are Mortgage Insurance Premiums Deductible?
Generally, home mortgage interest is any interest you pay on a loan secured by your home (main home or a second home). The loan may be a mortgage to buy your home, or a second mortgage. You can’t deduct home mortgage interest unless the following conditions are met. You file Form 1040 or 1040-SR and... Read More