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Your Guide to 1099s

By Tania Vallarta Introduction Every January, businesses must issue Form 1099-Misc or NEC to non-incorporated entities or individuals who they paid at least $600 by a method of payment other than credit card for performing a service to their business. Keep reading for best practices and let Wiss help you stay in compliance! When to Use Your EIN vs SSN If your business provides a service to another business, you may need to complete a W-9 in order that a 1099 can be issued to you....

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Sales Tax: A Cautionary Tale

Sales tax. An area of the U.S. tax code that is so complex, many accountants dedicate their entire careers to understanding the nuances of the laws and guiding business owners through its complexities. This article breaks down the basics, so that small business owners know what questions to ask to ensure they comply with sales tax collection responsibilities and avoid potentially dire financial mistakes. But first, some important tax terminology Business owners do not pay or owe...

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Tax Implications of the Inflation Reduction Act

By Nicole DeRosa, CPA, MAcc Just a mere four days following the House passage, President Joe Biden signed the Inflation Reduction Act (IRA) of 2022 into law on August 16, 2022, which is projected to raise more than $700 billion in revenue through federal policy changes impacting U.S. energy, environment, and tax sectors.  Several noteworthy items that are not included in the final bill include: A provision to remove the itemized deduction cap for an individual’s state and local...

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Is Your Company Effectively Managing Tax Risk?

By Nicole DeRosa, CPA, MAcc, Senior Tax Manager IS YOUR COMPANY EFFECTIVELY MANAGING TAX RISK? The concept of “tax risk” is an increasingly important and regular topic of discussion across organizations, and for good reason. Businesses that operate across state lines or internationally can in certain cases trigger tax liabilities in jurisdictions where they do not have a physical presence. In addition, many countries are adopting policies which require greater transparency in tax...

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ASC Topic 842 & Government Contracting

By Jeremy Higginson, CPA Government contractors breathed a collective sigh of relief when the Financial Accounting Standards Board (FASB) pushed back the deadline for private companies and nonprofits to comply with new lease accounting rules in April 2020. Accounting Standards Codification (ASC) Topic 842, also known as Accounting Standards Update (ASU) 2016-02, Leases is now applicable for the fiscal year and interim periods beginning after Dec. 15, 2021. Topic 842 applies to both...

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Wiss and NetLease by Netgain partner to increase efficiency for ASC 842 lease accounting audits 

Netgain offers easy audit solution   Denver, CO, May 4, 2022 – The new lease accounting standard went into effect on Jan. 1, 2019 for public companies and on Jan. 1, 2022 for private and not-for-profit companies. Wiss spent two years evaluating different solutions and needed a lease accounting software solution in anticipation of the 2022 audit season.  Paul Peterson, Managing Partner, Wiss, reached out to Netgain, to evaluate NetLease for Auditors, their lease accounting product...

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Remote Employment 101: Multistate Payroll Simplified 

Navigating the minefield of payroll compliance for remote workers can make anyone pull their hair out.  There has been a big spotlight over the past year on the accuracy of paying remote employees, with states looking to ensure that resident workers are being taxed appropriately. It’s not as simple as hiring a new employee who happens to be working offsite. Hiring a remote worker in a new state might trigger new obligations, and non-compliance can be costly for employers. Payroll...

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Remote Employment 101: Hiring For Success 

If there is one thing that has changed in the past two years, it is that employers realize they can easily find talent anywhere, and they might now be willing to hire talent to work remotely.  Hiring remote workers across the country, however, brings different challenges that employers may not even think about.  Employers are typically subject to the employment laws of the state where the employee is working, so it is important that attention is paid to what each state and locality...

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What is the Angel Investor Credit Program?

What if there was a way to guarantee a return on an investment? If your business operates in one of the 29 states currently offering Angel Investor Tax Credit Programs, it may be possible.  These programs are popular avenues by which states incentivize innovation, job creation, and economic growth in their region and, in some instances, encourage the development of growing neighborhoods and minority-owned businesses. Parameters of angel investor credit programs vary drastically from...

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What Does Biden’s Executive Order Mean for Crypto Reporting?

By Nicole DeRosa, CPA, MAcc, Senior Tax Manager To further add to the “Crypto Crackdown,” yesterday, President Joe Biden signed the “Executive Order on Ensuring Responsible Development of Digital Assets” which set out his administration’s strategy to explore greater regulatory oversight of the digital asset market and prioritize the assessment of a Central Bank Digital Currency.  The devil is most certainly in the details; however, this is the most wide-reaching effort...

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Can I Raise Cash Flow for My Small Business With Government Money?

There’s nothing worse than finding out you could’ve qualified for government funding after it’s too late, especially when your business is in its infancy and you could use all the cash you can get your hands on. Most of the founders we advise aren’t aware of the financial help that’s out there, or which programs are available for their business.  We introduce two specific opportunities for government funding that are important for startups to know about: national tax credits and...

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Build Back Better Act: the Legislative Lull That Won’t Budge

Last year was another busy legislative year with new administration taking office and tax laws being passed left and right.  The American Rescue Plan was enacted back in March; the Infrastructure Investment and Jobs Act (IIJA) was signed into law in November and last, but certainly not least we come to the Build Back Better Act (BBBA) which was the last piece of major legislation the Biden administration sought to enact in 2021.  In the face of opposition by some moderate Democratic...

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How can I take advantage of Qualified Small Business Stock?

In the early days of startup formation, it’s helpful to think years into the future — more than five years, to be exact. That’s the minimum term to which the Qualified Small Business Stock (QSBS) tax exemption applies. QSBS is a big incentive for structuring your U.S.-based business as a C corporation (or converting from an LLC) because it’s reasonable to assume your investors will someday want to exit. When they do, they could be looking to qualify for this huge tax break. What...

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Significant Change to the Treatment of R&E Expenditures Now In Effect

As 2022 kicks off and tax legislation continues to be stalled in Congress, the amendment to Internal Revenue Code (IRC) Section 174 originally introduced by the 2017 tax reform legislation, the Tax Cuts and Jobs Act (TCJA), is now in effect. TCJA’s amendment to Section 174 requires U.S.-based and non-U.S-based research and experimental (R&E) expenditures to be capitalized and amortized over a period of five or 15 years, respectively, for amounts paid in tax years starting after...

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Interim IRS Guidance on Research Credit Refund Claims

By Frank Calabrese, Senior Tax Manager The IRS has released two pieces of interim guidance on its revised administrative policy regarding valid research credit refund claims, as originally announced on October 15, 2021. On January 3, 2022, the IRS issued procedural guidance for applying the revised administrative policy and, on January 5, the IRS published a corresponding set of frequently asked questions (FAQs) on the policy. Both the procedural guidance and the FAQs are effective...

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Updated Reporting Requirements for NY Tax-Exempt Organizations

By Eitan Balloul, Tax Manager, Not-for-Profit In November of 2021, Governor Kathy Hochul of New York signed bill A1141A/S4817A to repeal NY Executive § Law 172-b. This law required certain exempt organizations who were registered with the New York State Attorney General (Department of Law) to submit an additional filing with the New York Department of State. Executive § Law 172-b became effective on January 1, 2021, and to many Exempt Organizations, it meant the burden...

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How To Raise Capital Without a Startup Valuation

An exciting part of early-stage startup ownership is bringing on investors who believe in your mission. But before you offer them equity in your business, you have to figure out how much it’s worth.  Every startup is unique and, as with many other factors of entrepreneurial life, there’s no one-size-fits-all way to complete a valuation. However, there are some best practices you should follow when assigning a reasonable value to your company and appealing to investors with convertible...

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Incorporation 101: C-Corp vs. LLC

So you’ve decided to start a business. Once you get past the initial excitement of throwing ideas around with your co-founders, it’s time to make your first big decision: how you’ll structure your organization. Choosing a corporate entity type can feel overwhelming if you’ve never done it before. And even if you have, each industry and business has unique needs.  In this article, we’ll break down some important details you need to know about the two most common types of entities:...

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2021 Cryptocurrency Market: Year In Review 

Interest in and adoption of cryptocurrency (“crypto”) has been at an all-time high in 2021. In the past year, there have been a number of new, game-changing developments in the space which we will summarize in this piece. In addition to a market update, we will also highlight the most common audit, tax, and advisory themes that our teams have been discussing with our clients. Market Update The crypto market exploded in early 2021, with bitcoin reaching an all-time high of $65k in...

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2021 Year-End Tax Planning for Businesses

By Nicole DeRosa, CPA, MAcc, Senior Tax Manager As the U.S. entered 2021, many assumed that newly elected President Joe Biden along with Democratic majorities in the House and Senate would swiftly enact tax increases on both corporations and individuals to pay for the cost of proposed new infrastructure and social spending plans, potentially using the budget reconciliation process to do so. Since then, various versions of tax and spending measures have been negotiated and...

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2021 Year-End Tax Planning for Individuals

By Nicole DeRosa, CPA, MAcc, Senior Tax Manager As we approach year-end, now is the time for individuals, business owners, and family offices to review their 2021 and 2022 tax situations and identify opportunities for reducing, deferring, or accelerating tax obligations. Areas potentially impacted by proposed tax legislation still in play should be reviewed, as well as applicable opportunities and relief granted under legislation enacted during the past year. The information...

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Nicole DeRosa on Leadership, Opening Doors, and Getting Out of Your Comfort Zone

Nicole DeRosa, Senior Tax Manager at Wiss, sits down with Wiss Marketing to share her story. Could you tell us a little bit about your background? Personally, I have always gravitated toward math and science so I knew it was likely that I’d end up doing something in that general arena.  In my junior year in high school, I took an accounting class and knew at that point that I wanted to be an Accountant.  Unusual, I know because back then, the stigma of ‘an accountant’ was so “un-cool”...

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Wiss Helps You Run Your Business With an Eye on the Future

By Eliezer Gross, CPA Wiss is a full‐service accounting firm that provides more than annual tax compliance or updates on the latest tax law changes. Our clients frequently seek guidance during every stage of their business: startup, growth phase, succession planning, and exit. Here’s how Wiss has solved some of the challenges our clients face in the real estate industry. The Challenge: Real Estate Acquisition Clients in the growth stage of their business who make real estate acquisitions...

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Preparing for Tax Season

New for tax year 2021/tax season 2022: The IRS just released on November 8th their tips for getting ready for the upcoming filing season. Now is the time to start and make a list of the tax documents you are expecting and use that list to cross off the items as you receive them. Also keep in mind if you receive certain documents electronically or by mail so you can be on the lookout for these items. You can use your prior year tax returns and records as a guide for what to expect....

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Third Time’s the Charm?

A third version of H.R. 5376 (the Build Back Better Act) was released on November 3, 2021 by the House Budget Committee. This draft increases the state and local tax deduction, brings back many of the retirement proposals from the original September 13 draft of the Build Back Better Act, and retains the surcharge on high-income individuals, estates and trusts from the October 28 version. Below is a summary of where things stand today. Income Tax  State and Local Tax Deduction  Individual...

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R&D Tax Credits for the Technology & Software Industry

Generate cash from your past and future investments to develop or improve software. If your company has paid for software to be developed or improved in the U.S., you may be eligible for federal and state R&D tax credits equaling up to 25% of qualified spending. If your company is financing such activities outside of the U.S., the incentives may be even greater. These dollar–for–dollar offsets against regular income tax liability have enabled many startup and mature businesses...

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R&D Tax Credits for the Manufacturing Industry

The manufacturing industry alone claims annual R&D tax credits in excess of $7.4 billion. Innovation is driving the manufacturing industry, and the objective of R&D tax credits is to encourage exactly the type of efforts that are at the core of Industry 4.0. You don’t have to be developing new products or engineering brand new manufacturing processes to qualify for the R&D tax credit. If your company is attempting to develop or improve manufacturing processes or products,...

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R&D Tax Credits for the Healthcare Industry

Capitalizing on evolving patient care through past, present, and future innovation. R&D is likely to be a continued priority for the healthcare industry, as organizations in the space work to address the emerging needs of the aging population, respond to trends in telehealth and value-based care and fend off competition from new entrants, like Amazon, which has signaled that healthcare is a key priority for growth. If your organization has worked to develop a new or improved...

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Heads Up, Restaurants: Federal Relief Could Trigger a Single Audit

By Arnold Macalintal, Partner Since the outbreak of COVID-19, the restaurant industry has been one of the hardest hit by the pandemic’s impacts, leading to spikes in business closures, continued capacity limitations, and unprecedented loss in both jobs and sales. However, many establishments were able to keep their doors open and continue to serve customers throughout the course of the pandemic with the help of federal aid issued through the CARES Act programs, Restaurant...

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How Proposed Tax Law Changes Will Disrupt the Real Estate Industry

By Alexander J. Narcise, Partner-in-Charge, Real Estate & Construction Services The American Families Plan, which the White House describes as “once‐in‐a‐generation” legislation, is designed to help families cover basic expenses such as health care, education, and childcare. The plan, announced in March, includes about $1 trillion in investments and $800 billion in tax cuts over ten years, paid for in part by higher taxes on those making $400,000 or more per year. The...

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More NIL, More Taxes

By Nicole DeRosa, CPA, MAcc, Senior Tax Manager Up until recently, you probably thought of “little” or (literally) “zero” when the word nil was used in a sentence.  Over the past couple of months, however, the definition of this word has evolved into something much more meaningful.  The term “NIL” is an acronym that stands for “name, image, and likeness” and is now the center of attention for college sports. So why all the hype? On July 1st, various state laws coupled with...

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Winning a Gold Medal Can Be Taxing

By Nicole DeRosa, CPA, MAcc, Senior Tax Manager The price tag on victory is not cheap, at least for some.  When an athlete wins a medal at the Olympics, that medal comes with significant prize money in addition to the value of the medal itself.  Prize money awarded varies by medal type: $37,500 for a gold medal, $22,500 for a silver medal, and $15,000 for a bronze medal.  Medals and prize money won by a team are split evenly amongst the team members. The term “gross income”...

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Exempt Organizations and Sales Tax

By Eitan Balloul, CPA, Tax Manager – Exempt Organizations & Fred Komarow, Tax Manager- SALT Many Tax-Exempt organizations are required to pay or to collect sales tax on certain transactions. Sales tax is governed and applied at the state and local level, which means that each state has its own rules and compliance requirements that will apply to an organization operating within a particular jurisdiction. Collecting and reporting sales tax is a requirement when selling tangible...

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New Reporting Requirements for NY Tax-Exempt Organizations

By Eitan Balloul, Tax Manager, Not-for-Profit Effective January 1, 2021, many Exempt organizations that file Form NY CHAR500 with the Attorney General must file the same information with the New York Department of State (“DOS”).  There are 3 different potential reports for filing with the Department of State:  1. Annual Financial Disclosure Reports – Under Executive Law Section 172-b (1), (2) & (9)  Charitable organizations that receive more than $250,000 in gross...

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The Pass through Entity Tax (PTET) Now Applies to New York State – Here’s What You Need to Know.

Featuring Phil London, Partner Emeritus Legislative changes in the New York State budget have created the highest combined local tax rate in the country for some New York City residents. At the same time, a Pass Through Entity Tax (PTET) was enacted in New York State. Below, Philip London, member of the New York State Society of CPAs, and the New York, Multistate and Local Taxation committee, provides insight on the new law. Tell us about your involvement in the passing...

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The IRS Does it Again – Another Retroactive 2020 Tax Change

By Nicole DeRosa, CPA, MAcc, Senior Tax Manager First the unemployment compensation exclusion…now this. With less than a week until the original tax filing deadline, the IRS announced the suspension of the requirement to repay excess advance payments of the 2020 Premium Tax Credit (“PTC”) which was a provision rolled out with the American Rescue Plan Act of 2021 (“ARPA”).  Unfortunately, being that the unemployment compensation exclusion was at the forefront of the ARPA,...

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Got Unemployment Compensation? Don’t Rush to File or Amend Just Yet!

By Nicole DeRosa, CPA, MAcc, Senior Tax Manager Last week, the $1.9 trillion American Rescue Plan Act of 2021 signed into law by President Biden included a very welcome retroactive tax provision for unemployed workers.  The bill provides that up to the first $10,200 of unemployment compensation benefits, paid to you in 2020, can now be excluded from taxable income, provided household income is under $150,000.  Although a very welcomed provision for the unemployed, there...

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$1.9 Trillion American Rescue Plan Released – Perhaps the 3rd Time is a Charm!

By Nicole DeRosa, CPA, MAcc, Senior Tax Manager  The much anticipated $1.9 trillion American Rescue Plan was released by lawmakers last week and passed by House by a near party-line vote of 219-212 early Saturday morning.  The third stimulus package is now on its way to the Senate, which is expected to pass in hopes to meet a mid-March deadline, albeit with some potential changes.  Once signed into law by President Biden, this 592-page stimulus package will offer a wide range of...

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PPP Processing Delays – More Communication Required from SBA

By Travis Miskowitz, Manager CFO Advisory When the Small Business Administration rolled out the Paycheck Protection Program in 2020, there was an immediate need to stem the losses and financial difficulties that small business owners were facing due to the pandemic and government-mandated shutdown orders. The early days of PPP were fraught with processing issues, incomplete or inconsistent guidance, and a lack of reliable resources for small business owners to reference when applying...

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The Business Interest Expense Limitation under IRC Section 163(j): What You Need to Know for the 2020 Tax Year

By Jennifer Beceiro, Tax Manager & Eliezer Gross, Real Estate Tax Director The Tax Cuts and Jobs Act (TCJA) amended IRC Section 163(j) that limited the deductibility of business interest expense for taxable years beginning after December 31, 2017. Business interest expense is limited to the sum of the Taxpayer’s business interest income, floor plan financing interest, and 30% of Adjusted Taxable Income (ATI). There are two situations that Taxpayers may not be subject to the 163(j)...

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Straight Outta Congress: How to Maximize the Employee Retention Credit (ERC) & Paycheck Protection Program (PPP)

By Travis Miskowitz, Manager, CFO Advisory This is a developing story; updates will be published as additional information becomes available. Update: March 3, 2021 As we enter March, we would like to remind our clients and friends that they may be eligible for 2 very beneficial programs: Employee Retention Credit (ERC) and a 1st Draw or 2nd Draw PPP loan. The ERC is a refundable credit which can now be claimed retroactively by PPP borrowers to 2020 if the company meets 2 main eligibility...

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PPP “Yeah, You Know Me” – 3rd PPP Application Window Opening Soon

By Travis Miskowitz, Manager, CFO Advisory Late Wednesday evening, the U.S Small Business Administration (SBA) in coordination with the Department of Treasury, issued guidance for the revamped Paycheck Protection Program (PPP) authorized by the Economic Aid Act of 2020. The newly released guidance includes: Interim Final Rule (IFR) “Business Loan Program Temporary Changes; Paycheck Protection Program as Amended” an 82-page consolidation of existing PPP guidance in the form of 24...

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Breaking Down the Employee Retention Credit in the New COVID Relief Bill

By Ilya Brodetskiy, Tax Manager Some significant updates are affecting the Employee Retention Credit, but there are still some important unknowns. Businesses that were ineligible for the ERC because they applied for PPP funding or who had over 100 full-time employees should reevaluate their eligibility based on the expanded program. The Consolidated Appropriations Act of 2021 introduced major changes to the Employee Retention Credit (ERC).  The first change allows businesses that...

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Unintended Effect of PPP Loan Forgiveness: Reduction in R&D Credit

By Travis Miskowitz, Manager, CFO Advisory The Paycheck Protection Program (PPP) created by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) provides loans to small and mid-size businesses to cover payroll and other specific costs during the coronavirus pandemic. PPP loans may be forgiven under particular circumstances, and are typically excluded from taxable income. Sounds simple—and if you focus on the question of payroll costs, it is. But companies that are interested...

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Treasury and IRS Issue Guidance on Deductibility of Expenses Related to a PPP Loan

By Michael Bodrato, Director of Taxes The US Treasury and the Internal Revenue Service (“IRS”) released guidance on November 18, 2020, in Rev. Rul. 2020-27 and Rev. Proc. 2020-51, clarifying the tax treatment of expenses where a loan received under the Paycheck Protection Program (“PPP”) has not been forgiven by the end of the year in which the loan was received. The IRS clarified in a notice issued on May 18, 2020, that since under the CARES Act businesses are not taxed on the proceeds...

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How a Biden Administration May Change the Tax Landscape

By Laurie Smith With the presidential election in our rearview window (barely), next up on everyone’s mind is how president-elect Joe Biden’s tax proposals may impact you. Before we get into the details of some key proposals and planning opportunities, it is important to note there are still many unknowns. Crucially, it will not be clear until early-to-mid-January 2021 which party will control the Senate, the result of two run-off races in Georgia taking place on January 5. The outcome...

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NJ Corporate Tax Update

by Azra Khan New Jersey enacted technical and substantive changes to 2018 Corporation Business Tax Reform On November 4, Governor Phil Murphy signed into law SB 3007 /AB 4809, which makes some significant changes to the Corporation Business Tax Act (“CBTA”) that may have both favorable and unfavorable results for corporate taxpayers based on specific circumstances. Many provisions of the bill are effective for the 2019 tax year so it will be important to analyze the impact as soon...

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IRS OK’s SALT Cap Workarounds

By Azra Khan On Monday, the IRS announced that it will be issuing proposed regulations allowing partnerships and S corporations to deduct state and local income taxes in full.  Under the Tax Cuts and Jobs Act, individual taxpayers are currently limited to a state tax deduction of $10,000, annually (otherwise known as the “SALT cap”). Some states, including New Jersey, Connecticut and several others have enacted a so-called “workaround” of the SALT Cap, either mandating or allowing...

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What Federal Tax Policy Changes Can We Expect? Clues From the Campaign Trail

By Michael LaMotta By this time next week, the U.S. presidential election will be in the rearview mirror, and we’ll all have more questions than we have answers. One of those big questions will be: What is the new president-elect’s vision for the tax code? Neither of the candidates has laid out a formal, detailed plan for this, although they have left clues about some aspects of tax policy along the campaign trail. Tax policy is an underappreciated element of federal policy; considering...

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IRS Issues Guidance Addressing President Trump’s Order on Payroll Tax Deferral

By Michael Bodrato Presidential Memorandum On August 8th, President Trump signed a Presidential Memorandum to direct the Treasury Secretary to use his authority to defer the withholding, deposit and payment of certain payroll taxes from employees suffering under the economic hardships brought about by the Coronavirus Pandemic.  The President’s order is made applicable to wages and compensation paid during the period of September 1, 2020, through December 31, 2020, and is subject...

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IRS Backlog Causing Incorrect Late Payment Notices

By Mike Bodrato The Internal Revenue Service, in its most recent update on IRS Coronavirus Tax Relief webpage, has posted information regarding the handling of incorrect late payment notices.  The IRS notes that they continue to process returns and issue refunds and are working hard to get through its correspondence backlog. However, the IRS states that it is experiencing delays in processing returns, due to limited staffing. The backlog of correspondence includes checks that have...

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Get To Know Federal Tax Form 5471, and The Post-2017 Revisions

By Mary Vasilescu The IRS collects information about foreign corporations with substantial United States (U.S.) ownership interests using Federal Tax Form 5471, Information Return for U.S. Persons With Respect to Certain Foreign Corporations. Form 5471 is used by certain U.S. persons who are officers, directors, or shareholders of certain foreign corporations to satisfy the reporting required under the Internal Revenue Code (IRC) and the related Treasury Regulations. Beware Hefty...

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Expenses Relating to PPP Forgiveness are Nondeductible

By Evan Gernant On Thursday, April 30, the IRS issued Notice 2020-32 clarifying that to the extent a Paycheck Protection Program (PPP) loan is forgiven, the associated expenses will be nondeductible for federal tax purposes.  The CARES Act made it clear that any amount of forgiveness of a PPP loan would be non-taxable.  What was not addressed and left for interpretation was whether the associated expenses would be tax-deductible.  Many were hopeful for a better ruling from the IRS...

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Net Operating Losses Under the CARES Act

By Evan Gernant On Thursday, April 9, the IRS issued guidance on the treatment of net operating losses under the provisions of the CARES Act. Revenue Procedure 2020-24 provides procedures to elect to revoke the carryback period for NOLs arising in 2018 and/or 2019  Background:  The Tax Cuts and Jobs Act changed the treatment of NOLs.  It generally provided that NOLs arising in tax years beginning after December 31, 2017 were no longer permitted to be carried back and are deductible...

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Additional Tax Filing Relief from the IRS

By Michael Bodrato The IRS released yesterday additional tax return filing and payment relief in Notice 2020-23, which applies to all taxpayers that have a filing or payment deadline falling on or after April 1, 2020, and before July 15, 2020, including individuals, trusts, estates, corporations, and other non-corporate tax filers. In addition, Notice 2020-23 provides that this period of time will be disregarded by the IRS in calculating any interest, penalty, or additions to tax...

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Key Tax Provisions of the $2 Trillion CARES Act

By Mike Bodrato The Senate voted last night, 96-0, to approve the Coronavirus Aid Relief, and Economic Security Act or the CARES Act, which has more than $2 trillion in spending and tax breaks to assist economically and fund a nationwide effort to stop the coronavirus.  At this writing, the CARES Act is still awaiting House approval and the President’s signature, which is not expected until tomorrow. The bipartisan legislation includes about $500 billion that can be used to back...

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IRS Releases Official Guidance After Treasury Secretary’s Announcement

by Evan Gernant Following Secretary Mnuchin’s earlier announcement, the Treasury Department released guidance on Friday, which supersedes and expands upon the guidance issued earlier this week that gave taxpayers extra time to pay their taxes but not to file. The new guidance provides for the following relief: The filing of 2019 federal income tax returns and the payment of 2019 federal income tax (including tax on self-employment income) due on April 15, 2020, is automatically...

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U.S. Treasury Response to the Coronavirus

by Evan Gernant The Coronavirus has intruded into all facets of our lives.  As we all try to grapple with the uncertainty this situation brings we still find ourselves in the midst of tax filing season, an already stressful time for business owners and other taxpayers. The Treasury Department issued guidance yesterday clarifying Secretary Mnuchin’s announcement on Tuesday that taxpayers can delay income tax payments due April 15, 2020.  The guidance provides that for all taxpayers...

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Elective Business Alternative Income Tax for Pass-Through Entities to Address Federal Limitation on State and Local Deduction

On January 13, 2020, Governor Phil Murphy signed into law Senate Bill 3246 establishing the business alternative income tax, an elective New Jersey business tax for pass-through entities. A corresponding refundable state gross income tax credit is allowed for the owners of the pass-through entities to offset personal or corporate income tax liability.  The pass-through entity tax applies to tax years beginning on or after January 1, 2020.  The intent of the new legislation is to...

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Rising to the Challenge: How Wiss Responded to Historic Tax Legislation

An interview with Michael LaMotta, Partner-in-Charge, Tax Services at Wiss & Co. LLP On December 22, 2017, the Tax Cuts and Jobs Act was signed into law. It presented the most significant changes to the tax code in over thirty years, and its effects were wide-ranging. Everyone from individual taxpayers and business owners to accountants and financial advisers had to learn the ropes. Now, two years after the bill was passed, many are still playing catch-up. “When the tax reform...

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Here’s Why Your Tax Refund Might Not Be What it Once Was

Updated 7/30/2019. This 2018 U.S. federal tax filing season, the good news might actually be the smaller refunds seen by many Americans. However, you might be understandably hard to convince if you, your employees or family members fall into this category. At this point in the tax return season, many are dismayed to find their refunds are smaller than expected. Or non-existent, in the case of those shocked to find that they owe more. Spoiler alert: the culprit is most likely to be...

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Trust Nexus Tax Case on SC Docket Could Have Wide Ranging Implications

By Arfa Scott Following its June 2018 decision in Wayfair, the U.S. Supreme Court continues to focus on cases that deal with how much taxation states can impose and in what circumstances.  In January 2019, the nation’s highest court agreed to look at under what circumstances a state can impose its income tax on a trust by granting certiorari in the case of North Carolina Dept. of Revenue v. Kaestner Family Trust. The Kaestner Trust case involves a New York trust whose only contact...

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Retirement Savings and Tax Deduction Strategies for 2018 Filers

Whether you’re self-employed or working for someone else, tax filing season is a great excuse to start thinking about strategies to lower your taxable income and maximize your retirement savings. You still have time. You have until April 15 to make contributions to your retirement accounts and have it apply to the 2018 tax year. If you file for an extension, your deadline for doing this in 2019 is October 15. The following information will be especially useful if you discover or...

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2018 New Jersey Tax Amnesty Program

Starting on November 15, 2018 and ending January 15, 2019, the State of New Jersey will hold a 60-day tax amnesty program aimed towards taxpayers who have delinquent taxes owed to the state.  This will provide taxpayers an opportunity to file past tax returns and/or pay outstanding taxes due to the state, including a one-half reduction of the interest due as of November 1, 2018. The amnesty program only applies to outstanding filings and payments due for tax returns which were due...

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Hardship Withdrawal Rule Changes from the New Tax Code

By Laura Zindel, CPA Details of the Trump Administration’s Tax Cuts and Jobs Act are so complex that it is easier for businesses to discuss the details and ramifications in smaller pieces. One specific section of the Tax Cuts and Jobs Act involves changes to rules affecting hardship withdrawals from your employees’ benefit plan account, most commonly 401(k) and 403(b) plans. The definition of a hardship withdrawal hasn’t changed. If a plan permits, a hardship is an early withdrawal...

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Treasury Publishes Proposed Regulations on 20% QBI Deduction

On August 8 the U.S. Treasury and Internal Revenue Service (IRS) released highly anticipated proposed regulations providing rules and clarification regarding the 20% Qualified Business Income (QBI) deduction.  Concurrently, the IRS also released a FAQ listing, which walks through the basics of the QBI deduction and Notice 2018-64, which provides guidance on ways in which taxpayers can compute “W-2 wages” with regard to the QBI deduction limitation.  The regulations attempt to clarify...

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Governor Murphy Signs State Budget

On July 1, 2018, Governor Murphy signed New Jersey’s 2019 budget. Here are a few highlights of which you should be aware. Main highlights: Increased income tax rate, effective for the 2018 tax year, to 10.75% for individual taxpayers whose incomes are at or above $5M A temporary corporate business tax surcharge of 2.5% for 2018 & 2019 and 1.5% for 2020 & 2021 Effective for the 2018 tax year, an increase in the state property tax deduction cap from $10,000 to $15,000 There...

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ALERT: Supreme Court Expands States Ability To Collect Sales Tax

The Supreme Court cleared the way Thursday for state and local governments to collect new sales taxes from online retailers and others with substantial sales into a state. The ruling in the South Dakota v. Wayfair case opens the door for states to require out-of-state online retailers and other remote sellers to collect sales tax from their customers, overturning a prior court decision that states have fought for years and that the court upheld in 1992’s Quill case. In 1992,...

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Potential 15% Increase in NJ Angel Investor Tax Credit Program

By Bill Beiermeister, CPA and Ryan Silva, CPA, CFE, CVA In January 2013, Governor Chris Christie signed legislation creating an angel investor tax credit program to spur job creation and growth in New Jersey’s current and next generation of high-skill, high-wage emerging technology industries. Under the current program New Jersey offers a 10% investor tax credit for an individual that invests in a New Jersey emerging technology company up to a maximum of $500,000 for the tax...

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How Manhattan’s Commercial Rent Tax (CRT) Changes Might Benefit Your Bottom Line

If you rent commercial space for a company located in designated sections of Manhattan, you might soon qualify for significant tax relief. Your business could save thousands of dollars annually as a result of upcoming changes to New York City’s Commercial Rent Tax, or CRT. First, a little background. Manhattan’s CRT The CRT is currently paid by commercial tenants renting space below 96th Street and above Murray Street in Manhattan who pay at least $250,000 in annual rent. The effective...

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IRS ISSUES NEW UPDATED WITHHOLDING TABLES

One of the most often heard Congressional talking points for the Tax Cuts and Jobs Act (TCJA) was that millions of workers would see an increase in their take home paychecks. To this end, on Thursday, the IRS issued new wage withholding guidelines. The guidelines are needed so employers can calculate how much tax to withhold from employees’ pay. Employees should begin seeing changes in their paychecks by February 15th (or sooner) since it normally takes about a month to update systems....

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IRS Disaster Relief: Relief for Taxpayers Affected by Hurricanes Harvey & Irma

By: Evan Gernant The IRS has published various notices granting tax relief to “affected taxpayers” of hurricanes Harvey, impacting Texas beginning August 25, 2017, and Irma, impacting Puerto Rico, the U.S. Virgin Islands, Florida and Georgia just a few weeks later. Affected taxpayers are defined as: Individuals whose principal residence is located in a covered disaster area; Businesses whose principal place of business is located in a covered disaster area; Any relief worker affiliated...

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End-of-Year Tax Planning: How to Lessen Year-End Stress

By Laura Melville We are more than halfway through 2017 – and that means the fourth quarter is already on the horizon. When those final three months of this year arrive, it’s time for your business to focus on planning for 2018 in earnest. Unfortunately, many businesses wait to begin year-end planning until then, as well. Your team will already have its hands full preparing budgets and mapping out your company’s strategies for the following year, and an end-of-year tax preparation-planning...

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Meals and Entertainment: How to Classify Business Expenses for Tax Purposes

By Louann Cassano Whether it’s drinks with a client or dinner during a work trip, meals and entertainment are generally tax-deductible business expenses. However, the size of the allowable write-off depends on the circumstances of the expenditure, including the purpose of the meal or entertainment, who the recipient is and where the expense takes place. If you don’t understand the IRS rules that govern these deductions, you may be tempted to lump all meals and entertainment into...

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10K Plus in Your Foreign Account? File an FBAR to Avoid a Tax Penalty

If you maintain a foreign financial account, which could be a bank account, a mutual fund, a brokerage account, or any other sort of account, that contains a collective value of $10,000, you may be requested by the Bank Secrecy Act to report your account annually to the Department of Treasury through electronic filing. The Report of Foreign Bank and Financial Accounts, FBAR, is a form that must be recorded directly with the office of Financial Crimes Enforcement Network, or FinCEN. Those...

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If You’re Self-Employed, You May Qualify for Insurance Deductions

By Wiss Associate For myriad professionals, becoming an entrepreneur can be a dream come true. Fortunately, health insurance deductions can make maintaining that dream much easier. The Self-Employed Health Insurance Tax Deduction within the Affordable Care Act can assist in lowering your adjust gross income by your payment quantity in premiums on dental, medical, and qualified long-term care insurance for you and your loved ones. For self-employers unable to access a partner’s insurance...

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No Health Coverage? Be Prepared to Pay a Hefty Price

As of now, Obamacare’s individual mandate requests that you purchase health insurance. If you can afford the coverage and refuse to acquire it, a big fee could be headed your way. For the tax year of 2016, the Individual Shared Responsibility fine skyrocketed to 2.5 percent of an individual’s complete household adjusted gross income. However, for the new year and beyond, the amount will stay at 2.5 but the flat fee will be regulated for inflation. For each month you do not have coverage,...

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Tax Benefits of Charitable Giving

By Wiss Associate As the new year is set in motion and you tuck away holiday presents, you may have stumbled upon items that you rarely ever use. Instead of finding additional space for these objects, it can prove to be more beneficial—and profitable—to donate them! If you break down your deductions, a contribution to an eligible philanthropic group can award you a charitable contribution deduction against your income tax.  Normally, you can subtract up to half of your adjusted gross...

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No Phishing! Watch Out for Fake IRS Calls

Have you received a vague phone call from a person claiming to be the IRS, demanding that you cough up money to pay taxes without providing any tangible information? These callers can be relentless and may have ordinary names, persuasive IRS badge numbers, and transform your caller ID to display the words “IRS” across it, as if the actual organization is calling you. Before you panic, this is a scam called phishing, where frauds posing as the IRS make unsolicited communication to...

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Plug in Your Car and Receive a Tax Break

By Wiss Associate Have you recently purchased an electric or hybrid car? If so, you may be eligible for a significant tax credit. Consumers of these energy-friendly vehicles can benefit from a tax break of $2,500 to $7,500, contingent on two essential factors: a car’s battery size and the amount of income taxes you owe during a specific year. Contrariwise, vehicles that have 4 kWh batteries can be eligible for a $2,500 tax benefit. In order to stay informed on the complex rules of...

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New Doors, Windows, or AC Unit? Get ready to receive a tax credit!

By Wiss Associate If you made your home a little more energy efficient last year, you may qualify for a tax credit on your federal income tax return. In previous years, to encourage clean energy conservation in residences of Americans everywhere, the Department of Energy and the EPA have worked collectively to develop Energy Star, a program designed to promote business and home energy efficiency by deeming appliances like solar panels, air conditioning and heating systems, and windows...

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Trump & Republican Tax Proposal

By Evan Gernant With Donald Trump set to move into the United States Presidency in January of 2017 and Republicans retaining control of both houses of Congress, the chances of us seeing significant tax legislation in the near term are likely. During his campaign, president-elect Trump put forward various proposals for substantial changes to the United States tax code. Furthermore, in June of 2016, House Republicans issued their “blueprint” for tax reform. Many of the Trump and House...

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How the Permanent QSBS Capital Gains Exclusion Benefits Investors

By Kevin Kerrigan The relatively unknown Qualified Small Business Stock (QSBS) capital gains exclusion was permanently extended in December 2015, giving many investors and entrepreneurs much reason to celebrate. While the QSBS tax break has been around since early 2009, the 2015 permanent extension incentivizes small business investors to look more closely at the QSBS. Here are some of the advantages, conditions and drawbacks of QSBS. Overview of the QSBS The QSBS tax incentive was...

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How to Make 2016 Your Most Organized Tax Year Ever

By Paul Ursich So you and your company survived another tax deadline. Congratulations. Now, while the memory is still fresh, is the ideal time to conduct a post-mortem of your current process to identify shortcomings and strategies that will help you boost efficiency and accuracy next year. Here are a few suggestions you can use to kick-start your new processes. Review withholding allowances Large tax refunds seem like a good thing when you get them, but it means the government has...

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State Nonresident Withholding Taxes: What you and Your Stakeholders Need to Know

By Mark Feldstein No one likes to receive a bill for taxes, penalties and interest from a state where they’ve never lived — especially without a clear understanding of why they are receiving it. But if your company has stakeholders who aren’t domiciled in the states your business operates in, your company may be required to pay nonresident taxes on their behalf. If you’re not aware of nonresident withholding taxes and how they work, you could end up with confused, angry shareholders...

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Using Tax Certiorari to Challenge New York City Tax Assessments

By Wiss Associate Do you feel that your latest New York City real estate tax assessment was unjustified? If so, you have a strong tool for challenging unfair assessments: a Tax Certiorari. The Certiorari is a classification of challenges that property owners can make before the city’s Tax Commission as the aggrieved party in an assessment. Parties can include real estate developers, landlords and individuals with a financial or other specified interest in the property. There are...

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These Cost Recovery Provisions Have Yet to be Renewed

By Craig Jackson It’s that time of year again, when business owners and accounting firms try to predict which federal depreciation provisions Congress will renew for 2016 — and which will not make the cut. Several depreciation provisions expired at the end of 2014, potentially impacting taxpayers who are accustomed to these accelerated depreciation provisions.  The uncertainty surrounding which provisions will renew has made the tax planning process challenging and unpredictable. To...

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Exploring Charitable Gifting Options

By Kevin Kerrigan Americans donated nearly $260 billion to charitable causes last year, according to Giving USA Foundation. The impressive figure demonstrates the value that U.S. residents, businesses and nonprofits place on charitable giving, but it is an ongoing challenge for top earners to find effective gifting strategies that maximize the tax benefit of their charitable donations. Here are two gifting strategies worth exploring when making large donations. Donor-advised funds A...

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New York Sales Tax and Cloud Computing: What you Need to Know

By Phil London One of my guiding principles for giving clients strategic tax advice is don’t make a move simply to minimize the tax impact without making sure that your decision makes sense from all other business perspectives. For example, an opinion issued by the New York State Department of Taxation and Finance has businesses considering the tax ramifications of moving operational software to the cloud. The cloud The cloud includes servers, programs and computing services that...

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How Exporters Can Take Advantage of IC-DISC Tax Benefits

By Chris Colyer It’s not often that you hear good news on the U.S. tax front, but if you have a small to medium-sized company that sells product into markets outside the United States, forming an Interest Charge – Domestic International Sales Corporation (IC-DISC) could offer tax advantages. The federal government established the IC-DISC classification many years ago, but many businesses eligible to take advantage of the tax incentives are failing to do so. That’s at least in part...

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