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Tag: Tax

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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Do You Qualify for the New Jersey PILOT Program?

By Alexander J. Narcise and Michael Kroll Under New Jersey’s Payment In Lieu of Taxes (“PILOT”) program (N.J.S.A. 40A:20-1), many distressed areas of the state are seeing a resurgence. The PILOT program allows municipalities to exempt developers from full property taxes for a set period of time when making improvements to existing buildings or creating new projects in areas in need of redevelopment, aiming to encourage commercial, residential, and industrial development. Developers...

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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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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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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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The Tax Cuts and Jobs Act of 2017

by Mary Vasilescu In December 2017 the U.S. passed a comprehensive tax reform package focused on supporting U.S. investments and the repatriation of foreign profits. The Tax Cuts and Jobs Act of 2017 (TCJA) lowered the corporate federal tax rate from 35 to 21 percent and made significant changes as to how foreign generated income would be taxed going forward. The TCJA enacted a “territorial” tax system and at the same time introduced provisions aimed to prevent U.S. companies from...

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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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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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Toss Your Paper Receipts for a Better Digital Solution

Is your wallet stuffed with business receipts that you just don’t have time to organize? Do you dread preparing expense reports? Does your bookkeeper spend an inordinate amount of time chasing down those tiny pieces of paper and explanations from salespeople in far-flung regions? How often do your employees feel cheated out of reimbursement because they lost proof of valid expenditures? In other words, is your business still being held hostage to the dreaded paper receipt? It needn’t...

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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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Finding Tax Advantages in Opportunity Zones

By Michael Kroll, CPA and Larry DiPasquale, CPA, MST The Tax Cuts and Jobs Acts has been a popular topic this year where the focus has been mainly on tax cuts. However, there is a lot more to the new tax law than just tax cuts.  There are new provisions providing significant tax benefits for investments in so-called Opportunity Zones and below are the details you need to know. Distressed Area Investment The idea behind the Opportunity Zones program is to create tax incentives for...

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New Jersey & New York Attempt Work-around on the SALT Deduction Limitation

New Jersey Governor Phil Murphy signed legislation this past Friday (May 4, 2018) which attempts to work-around the state and local tax deduction limitation imposed by the Tax Cuts and Jobs Act, which was enacted in December of 2017.  Under that federal legislation, the aggregate state and local tax deduction (which includes state income, property and sales tax) an individual taxpayer may claim is limited to $10,000 per year.  New York already has their version of a work-around...

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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

By Kerri Nelan 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...

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Impact of the New Tax Law on Engineering Firms

The “Tax Cuts and Jobs Act” signed by President Trump on December 22, 2017, contains numerous provisions that impact business that specialize in providing professional services in the field of engineering.  Below is a summary of some of the key provisions: Corporate and Non-corporate:  Limits on the Deduction of Business Interest – IRC Sec. 163(j) Generally, for tax years beginning after Dec. 31, 2017, every business, regardless of its form, will be subject to a...

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Tax Reform Manifesto for the Real Estate Industry – Part 3

This posting is a part of a 3-part series. The full article will be available in the coming weeks. Click here to read Part 1. By Alexander J. Narcise, CPA and contributions from the entire real estate accounting services team: Michael Kroll, CPA Larry DiPasquale, CPA Steve Warholak, CPA Michael Bodrato, CPA Kyle Pennacchia, CPA James Jenco, CPA Ken Trainor, CPA Phil London, CPA Chris Gati, CPA Charlie Komack, CPA The Internal Revenue Code has historically provided many planning...

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QBI and Guaranteed Payments

While there is much to say about the complexity and application of the new Qualified Business Income (“QBI”) deduction provided under the recently enacted Tax Cuts and Jobs Act, I am going to focus on a narrow aspect of these rules that could have a significant impact on partners and partnerships. Under the new QBI deduction provisions, effective after January 1, 2018, an owner of a sole proprietorship, S corporation or partnership is entitled to a deduction equal to 20% of the “qualified...

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Tax Reform Manifesto for the Real Estate Industry – Part 2

This posting is a part of a 3-part series. The full article will be available in the coming weeks. Click here to read previous post. By Alexander J. Narcise, CPA and contributions from the entire Wiss and Company LLP Real Estate Team: Michael Kroll, CPA Larry DiPasquale, CPA Steve Warholak, CPA Michael Bodrato, CPA Kyle Pennacchia, CPA James Jenco, CPA Ken Trainor, CPA Phil London, CPA Chris Gati, CPA Charlie Komack, CPA The Internal Revenue Code has historically provided many...

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Tax Reform Manifesto for the Real Estate Industry

This posting is a part of a 3-part series. The full article will be available in thecoming weeks.  By Alexander J. Narcise, CPA, with contributions from the entire Wiss Real Estate Team: Michael Kroll, CPA Larry DiPasquale, CPA Steve Warholak, CPA Michael Bodrato, CPA Kyle Pennacchia, CPA James Jenco, CPA Ken Trainor, CPA Phil London, CPA Chris Gati, CPA Charlie Komack, CPA My take on this whole thing: The Internal Revenue Code has historically provided many planning opportunities...

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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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Upcoming Changes to New Jersey and New York Taxes

By Evan Gernant With tax reform legislation nearing enactment in Washington it’s easy to keep one’s focus on those headlines.  There are, however, important changes in New Jersey and New York tax that have already been signed into law and will impact local taxpayers.  Below is a summary of the more significant changes you will see affecting New Jersey and New York State taxpayers in 2018 and beyond. New Jersey The sales & use tax rate will continue decrease slightly.  A two-phase...

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Keep the Brews Flowing Without Affecting Cash Flow

Understanding the NJ Alcohol Tax By Paul Lembo You’ve perfected your batch. You’ve scouted your location. You’ve raised the capital. And now you are ready to venture into the wild, wonderful world of professional brewing. But before you make that first pour, make sure you understand the state tax laws that apply to your sales. In New Jersey, alcohol producers must pay not only state and federal taxes, but also an additional alcoholic beverage tax. These taxes can be significant,...

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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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You Cannot Automate a Relationship

By Ruth Raftery “Hello! My name is Samantha and I am an automated voice recognition answering service.  You can speak to me as you would with a live representative. Please tell me, what are you calling about today?” It seems many calls I make lately– whether to credit card companies or to other businesses – are answered by the type of technology that runs programs like “Samantha.” In my experience, these systems can never actually answer the types of questions...

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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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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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With the Gas Tax Bill Comes the Elimination of the NJ Estate Tax

By Ruth Raftery The much discussed bill raising the New Jersey gas tax by 23 cents per gallon was signed by Governor Christie on Friday October 14th.  Although not as widely publicized, the new law provides for another major change – the complete elimination of the New Jersey state estate tax. Up to now, and for the remainder of 2016, New Jersey has the lowest estate tax exemption in the country, subjecting estates worth more than $675,000 to estate tax at the time of death. By way...

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Christie Launches NJ Gas Spike to End Road Funding Crisis

By Christopher Colyer After an extensive three-month long political and financial stalemate, New Jersey Governor, Chris Christie and Democratic leaders reached a deal to renew the Transportation Trust Fund, reviving dozens of construction plans that remained lifeless for months on end. By proposing to raise the gas tax by 23 cents a gallon to replenish the fund, which is recycled and applied to road, rail, and bridge improvements for the state, New Jersey’s transportation projects...

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Why Business Owners Should Consider Estate and Gift Tax Saving Strategies Now

By Leo Matarazzo Updated 7/30/2019. The Treasury Department recently issued proposed regulations targeting the use of discounts that reduce the value of a family-owned business and any other family controlled entity for estate and gift tax purposes, which lowers a taxpayer’s ultimate tax liability at death. Potentially millions of dollars of estate tax savings are at stake if these regulations are adopted so it is important to remain informed and proactive on the issue. The regulations...

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Sales Tax Nexus – Comprehending your Business’ Sales Tax Obligations

By Wiss Employee In simpler times, a New York-based industry sold its products or services within its state boundaries. As such, it was their responsibility to gather and remit sales tax to the taxing authority of The Big Apple. However, thanks to the rapid advancements in technology, today’s corporate atmosphere has become much more multifaceted. As inter-state sales are becoming routine, the same New York-based company has many more consumers to choose from, amplifying their client...

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How to Avoid Tax Penalties on Complimentary Hotel Breakfasts

By Mark Feldstein When is a free meal not really free? When a New York State hotel is offering a complimentary breakfast to its guests. While complimentary breakfasts are free – in a sense – to your guests, if your hotel is audited, you could get a tax bill. And the tax penalties for months – or years – of presumed “tax-free” food can add up. New York sales tax and occupancy tax returns are, in most circumstances, subject to audit for up to three years, longer if fraud is suspected....

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How to Take Advantage of the Grow NJ Tax Credit

By Bill Beiermeister The only bad thing about tax credits is the possibility of missing out on one. To make sure that doesn’t happen to your business, here is some background on the Grow New Jersey tax incentive and how it could affect your company. Per-employee credits add up The Grow New Jersey Assistance Program is offered through the state’s Economic Development Authority (EDA) to encourage businesses in technology, manufacturing, warehousing, research and development and other...

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Manhattan taxpayers, be aware of the Commercial Rent Tax

By Kyle Pennacchia and Paul Ursich In New York City, the Commercial Rent Tax (CRT) is often overlooked, and many of those who miss it face penalites and interest for late or missed filings. Here’s a brief introduction to the tax, basic qualifications and links to more detailed information. Are you subject to the CRT? The CRT applies to Manhattan tenants who occupy or use property south of 96th Street for most trade, business, professional and commercial transactions. As with most...

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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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Protecting Your Personal Information During Tax Season

Protecting Your Personal Information During Tax Season By Wiss Associate  As accountants, we understand that your identity is just as important as your financial well-being.  With tax season just around the corner, scammers will use this opportunity to get access to personal information.  Some common strategies include receiving calls from: A self-proclaimed “Governmental Agency” U.S. Treasury or IRS Sweepstake entry representative We’ve all heard stories of someone who have fallen...

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