The Tax Professionals Blog

Tax Reform and the Recharacterization Rule

Posted by Lee Reams Sr. on

The Tax Cuts & Jobs Act repeals the special rule that allows a traditional IRA to Roth IRA conversion to be later unwound. Thus, for example, under the provision, a conversion contribution to a Roth IRA during a taxable year can no longer be recharacterized as a contribution to a traditional IRA (thereby unwinding the conversion). The provision is effective for taxable years beginning after December 31, 2017 (IRC Sec. 408A(d)(6)(B)(iii) as amended by TCJA Sec. 13611(a).

Read more →


W-2 After Death

Posted by Lee Reams Sr. on

A common error made by employers is to report payments made after the death of an employee on a W-2 withholding SS and Medicare taxes. Payments should be reported…

Read more →


Tax Preparation Fees

Posted by Lee Reams Sr. on

Under the Tax Cuts and Jobs Act, tier 2 (those subject to the 2% of AGI floor) miscellaneous itemized deductions are suspended for years 2018 through 2025. Tax preparation fees are part of the tier 2 miscellaneous deductions and therefore are no longer deductible unless…

Read more →


Compensation Distinguished From a Gift

Posted by Lee Reams Sr. on

Although gifts are generally excluded from the recipient's gross income, transfer by or for an employer to or for the benefit of an employee can't be excluded as a gift (Code Sec. 102(c)(1)).

 

Read more →


Business Pass Through Entities - A Basic Overview of the Sec 199 Deduction

Posted by Lee Reams Sr. on

There is lot of confusion among practitioners related to the new Sec. 199A deduction, how it is computed, and the limitations. This article is intended to provide a basic overview of the deduction.  However this is not a substitute for a more in-depth study of the subject before attempting to compute the deduction.

Read more →