Newsletters

IC-DISC: Reevaluating The Benefits After Tax Reform

The interest charge domestic international sales corporation (IC-DISC) is one of the few remaining tax incentives for U.S. exporters. It allows eligible businesses to convert a portion of their export income into lower-taxed dividends and to defer tax on this income until it’s distributed. But while the IC-DISC remains a viable option after the Tax Cuts and Jobs Act of 2017 (TCJA), the act may diminish its benefits. If you have an IC-DISC or are considering one, it’s important to assess whether the potential tax savings justify the cost. The…

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IRS Releases Further Clarification on Opportunity Zones

The 2017 Tax Cuts and Jobs Act included a variety of tax code updates and additional provisions. Among these was the creation of a new type of community development program, dubbed “Opportunity Zones.” The IRS defines these areas as “economically-distressed [communities] where new investments, under certain conditions, may be eligible for preferential tax treatments.” IRS Releases Additional Guidance on Opportunity Zones  On April 17, 2019, the IRS released a second round of guidance on Opportunity Zones. This was a welcome occurrence, since the original Opportunity Zone legislation was quite vague,…

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Oklahoma Pass-Through Entity Tax Equity Act of 2019

For all of you who saw their 2018 itemized deductions reduced because of the $10,000 cap on state and local taxes, there may be some relief beginning in 2019 if you are a member of a pass through entity (PTE). A pass-through entity is a general partnership, a limited partnership, a limited liability partnership, a limited liability limited partnership, a limited liability company, or an S corporation. Oklahoma passed a new law on April 29, 2019 that allows a PTE to file an election to pay Oklahoma income tax at…

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Tax Filing Reminders

May 15th  2018 calendar-year exempt organizations (Form 990 and 990-T) June 15th  2019 calendar-year corporations second installment of estimated income tax 2019 individual and trust second installment of estimated income tax September 16th 2019 calendar-year corporations third installment of estimated income tax 2019 individual and trust third installment of estimated income tax 2018 calendar-year S corporation income tax return (Form 1120S) on extension 2018 calendar-year partnership income tax return (Form 1065) on extension October 1st 2018 estate and trust income tax return (Form 1041) on extension October 15th 2018 calendar-year…

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Qualified Business Income Deduction in Oklahoma

Our newsletters have previously discussed Section 199A – the new 20% qualified business income (QBI) deduction allowed by the Tax and Jobs Cuts Act (TJCA) – as it relates to the Federal deduction on an individual tax return.  There has been recent conversation regarding the application of Section 199A on Oklahoma tax returns. Q & A published by the Oklahoma Tax Commission (OTC) has clearly stated that the deduction does NOT qualify as an Oklahoma deduction because Oklahoma starts with Federal Adjusted Gross Income (AGI) which is before the Federal…

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Deduction of Oklahoma Gambling Losses

Oklahoma HB 2667 was passed in the House on March 7 by a vote of 83-16 and is currently in the Senate awaiting action. If passed, gambling losses would be exempt from the Oklahoma itemized deduction limitation ($17,000) in the same manner as medical expenses and charitable contributions. Essentially, gambling losses would return to being deductible to the extent of winnings. The current language of the bill would apply the rule retroactively to tax year 2018. We will continue to watch the progress on this bill.  If you have already…

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IRS Expands Penalty Relief if Payments Fell Short in 2018

The IRS recently provided additional, expanded penalty relief to individual taxpayers whose 2018 federal income tax withholding and estimated tax payments fell short of their total tax liability for the year by lowering to 80 percent the threshold required to qualify for this relief. The IRS is now waiving the estimated tax penalty for any taxpayer who paid at least 80 percent of their total 2018 tax liability during the year through federal income tax withholding, quarterly estimated tax payments, or a combination of the two. The IRS has available…

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Federal Court of Appeals Upholds Clergy Housing Allowance

On March 15, 2019, the Seventh Circuit Court of Appeals overturned a 2017 decision by a Wisconsin district court which had declared the housing allowance unconstitutional.  Over 300,000 ministers in the US enjoy the benefit of a tax-free housing allowance, and the ruling by the Wisconsin court generated obvious concern. At issue was whether the tax benefit represented a “sponsorship of religion,” thus making it a violation of the Free Exercise clause of the US constitution.  In overturning the district court, the appellate judges determined that the housing allowance, as…

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Tax Filing Reminders

April 15th is the due date for the following: 2018 individual income tax returns 2018 annual gift tax returns 2018 calendar-year Estate and Trust income tax returns 2018 calendar-year C corporation income tax returns 2018 form 990-T for unrelated business income in a retirement account First installment of 2019 individual estimated tax First installment of 2019 corporate estimated tax April 15th is also the deadline for making: 2018 IRA contributions 2018 Oklahoma 529 plan contributions May 15th is the due date for: Forms 990 and 990-T for 2018 calendar-year exempt organizations…

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Tax Benefits for Investments in Qualified Opportunity Funds

The Tax Cuts and Jobs Act (TCJA) introduced two elections, one to defer gain from the sale of property that is reinvested in an investment in a Qualified Opportunity (QO) Fund and another to permanently exclude gain from the sale or exchange of the investment in the QO Fund. These elections can provide substantial tax benefits for taxpayers who can satisfy the detailed and quite complex set of rules. Designation of a QO Zone.  State governors, with IRS approval, designated certain census tracts that are low-income communities as Qualified Opportunity…

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