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IRS Offers Assurances of Deductibles for Partnerships & S Corporations
In advance of proposed regulations surrounding income tax deductions for certain businesses, the Internal Revenue Service (IRS) issued rules that would be included if those regulations are passed. The proposed regulations aim to clarify how state and local income taxes can be deducted by partnerships or S corporations that pay them.
Specifically, the proposed regulations would allow for partnerships and S corporations to deduct any income taxes that they pay. The deduction is used to compute its non-separate taxable income or loss for the year in which the payments were made. The deduction would not be subject to the deduction limitation at the state or local level for the partners or shareholders who chose to itemize deductions.
The guidelines in the IRS notice will apply starting now. They will also allow those in a partnership or S corporation to apply the guidelines to payments made after Dec. 31, 2017.
Taxpayers can find updates on these guidelines and other parts of the Tax Cuts and Jobs Act (TCJA) at IRS.gov on the Tax Reforms page. Taxpayers should also consult with an experienced and qualified tax professional in Phoenix, such as an accountant or Phoenix tax attorney.
Silver Law PLC represents taxpayers who are under audit or who are facing civil or criminal tax charges. Our attorneys can help you if you have not properly claimed deductions for your business, or you are facing other issues that may lead to tax penalty. We can represent you in audit, and we can help you find ways to minimize your tax liability and penalties. Call our office today to talk with a tax attorney about your case.
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