Categories for Uncategorized

2016 “Net Disaster Loss” Relief Available to Non-Itemizers & Taxpayers Subject to AMT

In general, no personal casualty loss (under Code Sec. 165(h)) can be claimed by a taxpayer who claims the standard deduction. Such losses can only be claimed as itemized deductions.The standard deduction isn't allowed for purposes of the alternative minimum tax (AMT).

Comparison of Tax Rates

Student Loan Discharged on Death or Disability

Gross income generally includes the discharge of indebtedness of the taxpayer. Under an exception to this general rule, gross income does not include any amount from the forgiveness (in whole or in part) of certain student loans, if the forgiveness is contingent on the student's working for a certain period of time in certain professions for any of a broad class of employers.New law. For discharges of indebtedness after Dec.

Domestic Production Activities Deduction Repealed

Under pre-Act law, taxpayers could claim a domestic production activities deduction (DPAD) under Code Sec. 199 equal to 9% (6% in the case of certain oil and gas activities) of the lesser of the taxpayer's qualified production activities income or the taxpayer's taxable income for the tax year. The deduction was limited to 50% of the W-2 wages paid by the taxpayer during the calendar year.

Charitable Contribution Deduction Limitation Increased

The deduction for an individual's charitable contribution is limited to prescribed percentages of the taxpayer's “contribution base.” Under pre-Act law, the applicable percentages were 50%, 30%, or 20%, and depended on the type of organization to which the contribution was made, whether the contribution was made “to” or merely “for the use of” the donee organization, and whether the contribution consisted of capital gain property. The 50% limitation ap...

Deduction for Personal Casualty & Theft Losses Suspended

Under pre-Act law, individual taxpayers were generally allowed to claim an itemized deduction for uncompensated personal casualty losses, including those arising from fire, storm, shipwreck, or other casualty, or from theft.New law. For tax years beginning after Dec. 31, 2017 and before Jan.

Employer's Deduction for Fringe Benefits Limited (Entertainment & Meals)

Under current law, a taxpayer may deduct up to 50% of expenses relating to meals and entertainment. Housing and meals provided for the convenience of the employer on the business premises of the employer are excluded from the employee's gross income. Various other fringe benefits provided by employers are not included in an employee's gross income, such as qualified transportation fringe benefitsNew law.

Child Tax Credit Increased

Under pre-Act law, a taxpayer could claim a child tax credit of up to $1,000 per qualifying child under the age of 17. The aggregate amount of the credit that could be claimed phased out by $50 for each $1,000 of AGI over $75,000 for single filers, $110,000 for married filers, and $55,000 for married individuals filing separately. To the extent that the credit exceeded a taxpayer's liability, a taxpayer was eligible for a refundable credit (i.e., the additional child tax credit) equal to 15%...

Estate and Gift Tax Retained, with Increased Exemption Amount

A gift tax is imposed on certain lifetime transfers (Code Sec. 2511), and an estate tax is imposed on certain transfers at death. Under pre-Act law, the first $5 million (as adjusted for inflation in years after 2011) of transferred property was exempt from estate and gift tax.

Increased Code 179 Expensing

A taxpayer may, subject to limitations, elect under Code Sec. 179 to deduct (or “expense”) the cost of qualifying property, rather than to recover such costs through depreciation deductions. Under pre-Act law, the maximum amount a taxpayer could expense was $500,000 of the cost of qualifying property placed in service for the tax year.