Tax professionals will be pleased to discover that the IRS is slowly but surely adding Tax Cuts and Jobs Act of 2017 (TCJA) resources to its website (http://www.irs.gov). The IRS Tax Reform webpage can be reached from its homepage or directly (https://www.irs.gov/tax-reform). While the IRS does provide some very useful materials on its website, other items can only be located through longer searches. One goal of this month’s column is to provide some tighter organization and easier access for CPAs to take advantage of these resources, although space constraints only permit a few materials to be highlighted here.
The Tax Reform Provisions that Affect Individuals webpage (https://www.irs.gov/newsroom/individuals) offers articles and tools addressing withholding, tax credits, deductions, U.S. armed forces members, retirement and education savings plans, and other topics. Several withholding-related articles are linked in various places on the IRS website, but a good place to start is the Paycheck Checkup page (at https://www.irs.gov/paycheck-checkup). A Tax Withholding Estimator tool (https://apps.irs.gov/app/tax-withholding-estimator) walks taxpayers through filing status, dependents, income sources, withholding schedules, adjustments, deductions, tax credits, and other factors that affect tax liability and recommendations for withholding.
“Be Tax Ready—Understanding Tax Reform Changes Affecting Individuals and Families” (FS-2019-2, February 2019, http://bit.ly/2nRRAk0) is a five-page summary of federal income tax withholding changes, increases in standard deduction amounts, changes to itemized deductions, suspension of deductions for personal exemptions, and brief descriptions of several other items. “Here’s a Quick Overview of Tax Reform Changes and Where Taxpayers Can Find More Info” (IRS Tax Reform Tip 2019-27, March 2019, http://bit.ly/2nQK09k) is a handy one-page outline with links to IRS publications and other resources covering tax rates, standard and itemized deductions, child and dependent-related credits, and personal and dependency exemptions. A similar tip sheet, “Tax Reform Brought Significant Changes to Itemized Deductions” (IRS Tax Reform Tax Tip 2019-28, March 2019, http://bit.ly/2miRvoU), briefly lists related changes and includes specific publications, as well as the IRS Tax Map search feature (http://bit.ly/2nRTHnW). Readers may already be aware of IRS Publication 5307, Tax Reform Basics for Individuals and Families (http://bit.ly/2nY6IvW), which was issued in 2018 and addresses multiple changes affecting individuals.
IRS resources for businesses are generally split between a focus on small and flow-through businesses versus larger and international enterprises, although the website does not make a particularly clean distinction. The main webpage is Tax Reform Provisions that Affect Businesses (https://www.irs.gov/newsroom/businesses), which provides a table of contents with a long list of topics, including income items, depreciation and other deductions, tax calculations, tax credits, accounting method changes, and some industry-specific materials.
The Tax Reform for Small Businesses webpage (https://www.irs.gov/tax-reform-small-business-initiative) lists several topics likely to be of interest for small business. One must-see feature, “Tax Cuts and Jobs Act: A Comparison for Business” (http://bit.ly/2nPLYGR), is an excellent table that compares the law before and after the TCJA for deductions, depreciation, fringe benefits, accounting methods, business structure, and opportunity zones.
“The Highlights of Tax Reform for Business” (FS-2018-17, October 2018, http://bit.ly/2n9jmIx) provides brief information on noninternational areas, such as the qualified business income (QBI) deduction, net operating losses, entertainment expenses, fringe benefit deductions, depreciation, and other changes. “IRS Highlights Tax Reform Changes that Affect Businesses” (FS-2019-3, March 2019, http://bit.ly/2mkFMX3) expands on the October 2018 fact sheet with more information on many of the topics. IRS Publication 5318, Tax Reform—What’s New for Your Business (http://bit.ly/2oEN0G7), published in November 2018, is a relatively short, but helpful reference.
The QBI has its own webpage (http://bit.ly/2nbkNX5), which provides an overview of the QBI component, the real estate investment trust/publicly traded partnership component, a list of non-QBI items, a safe harbor for rental real estate, and links to other IRS resources. “Facts about the Qualified Business Income Deduction” (FS-2019-8, April 2019, http://bit.ly/2mYF2au) expands upon the basic topics and provides more detailed definitions of a qualified trade or business and QBI.
“New Rules and Limitations for Depreciation and Expensing under the Tax Cuts and Jobs Act” (FS-2018-9, April 2018, http://bit.ly/2n7a67R) covers the new maximums under Internal Revenue Code (IRC) section 179 expensing, first-year bonus depreciation, and changes to limitations on listed property. A new release from September 2019, “Additional First Year Depreciation Deduction (Bonus)—FAQ” (http://bit.ly/2mXJ96J) summarizes eligibility, electing out, and qualifying property.
For larger entities, the International Taxpayers and Businesses webpage (https://www.irs.gov/newsroom/international-taxpayers-and-businesses) includes connections to information on topics such as business interest expense, depreciation and other deductions, and excessive employee remuneration. There are also several international topics, such as global intangible low-taxed income (GILTI), deduction for foreign-derived intangible income (FDII), base erosion and anti-abuse tax (BEAT), and transition tax on untaxed foreign earnings. It should be noted that a recent Treasury Inspector General for Tax Administration (TIGTA) report, Tax Cuts and Jobs Act: Assessment of the Implementation of the International Provisions (2019-34-064, September 2019, http://bit.ly/2movh52), found that the IRS has faced significant difficulties in providing guidance on the major international tax law changes, and tax preparers are waiting for additional IRS direction.
Another must-see table on the IRS web-site is “Tax Cuts and Jobs Act: A Comparison for Large Businesses and International Taxpayers” (http://bit.ly/2nU8ApE), which presents an extensive listing of tax law changes for income, deductions and losses, business structure, accounting changes, and the alternative minimum tax, as well as international provisions, such as deductions, exclusions, and the foreign tax credit.
The Tax Exempt and Government Entities webpage (https://www.irs.gov/newsroom/tax-exempt-government-entities) includes retirement plans, tax-exempt organizations, and tax-advantaged bonds. Two employer updates from June 2019 discuss employer reimbursements of moving expenses (https://www.irs.gov/newsroom/employer-update). A new set of FAQs on the IRC section 45S employer credit for paid family and medical leave (http://bit.ly/2nYnGdC) explains the credit and defines the requirements. “What’s New for Farmers in 2018?” (FS-2018-19, December 2018, http://bit.ly/2nUbMSa) explains the provisions that affect farmers most directly.
The IRS has a great collection of videos on its video portal (https://www.irsvideos.gov/); the offerings that specifically cover tax reform topics are highlighted in the sidebar. The videos are archived from continuing education webinars, and while the PowerPoint files are no longer available, the webpage for each presentation includes a complete transcript.
IRS Video Highlights
Tax Reform Basics for Individuals and Families
Tax Reform Basics for Small Businesses and Pass-Through Entities
Tax Reform Basics for the Qualified Business Income Deduction (Sec. 199A)
Tax Reform Basics for Employers
Tax Reform Due Diligence Requirements
Understanding Tax Reform Basics about Opportunity Zones