The IRS recently updated one of their publications which provides details for tax rules associated with employer provided fringe benefits (Publication 15-B). Some of you may ask, what are fringe benefits and why should I take the time to understand them?
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Andrew Luce, CPA •
The IRS recently updated one of their publications which provides details for tax rules associated with employer provided fringe benefits (Publication 15-B). Some of you may ask, what are fringe benefits and why should I take the time to understand them?
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Alyssa McBride, CPA •
The Tax Cuts and Jobs Act of 2017 created a lot of changes for taxpayers. One area that you should not overlook is the change to meals and entertainment. Entertainment is now nondeductible. Also no longer fully deductible are workplace meals, these now fall into the 50% deductible category. What is most concerning is that there is a current lack of information on business meals, these could be 50% deductible or they could fall into the nondeductible category. This could be a significant change for many taxpayers. We will keep you updated as more information becomes available. While we wait on the resolution, we have one recommendation you can immediately put in place: The IRS recently issued a news release that notes while some states are planning or have already implemented workarounds for the State and Local Tax (SALT) deductions, specifically mentioning state-established “charitable funds”, that the IRS is planning to issue proposed regulations in the near future to disallow these contributions. Those contributions would likely be determined by substance-over-form principles and be disallowed after the maximum $10,000 deduction for SALT taxes that was enacted by the Tax Cuts and Jobs Act.
New Jersey has responded to the notice by writing a letter discouraging the IRS from going down that path. To learn more see IRS news release IR-2018-122 or Notice 2018-54 which both address the issue. |
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