LMHS, P.C.

This chart compares current business tax provisions with the changes under the OBBBA. It shows how the law impacts clean energy credits, employer incentives, business deductions, reporting requirements, and investment programs. Overall, it highlights which tax breaks are expanded, made permanent, or eliminated for businesses starting in 2025 and beyond.

This chart compares current tax law with changes under the proposed OBBBA, highlighting how it affects individual tax rates, credits, deductions, and savings plans. It outlines provisions that become permanent, new benefits for families and seniors, expanded savings opportunities, and the elimination or reduction of certain deductions and credits. Overall, it shows how the OBBBA reshapes the tax code starting in 2025 and beyond.

Don’t let the penalty for underpayment of estimated tax apply to you. The penalty is more expensive than it first appears because the penalty payment is not tax-deductible.
The only sure way to avoid the underpayment penalty is to make sufficient, on-time estimated tax payments. Choosing a payment method such as IRS Direct Pay or EFTPS and setting up your installments to pay on time helps avoid the penalty.
If you miss a payment or don’t pay enough on time, you can make a catch-up payment that stops the interest charge penalty from running. But you can’t make the penalty go away.
Make sure you understand the exceptions that allow you to avoid the underpayment penalty. Given that the time value of money is once again a consideration these days, the exceptions can come in handy.

After years of delays, the first stage of the Corporate Transparency Act (CTA) goes into effect on January 1, 2024. It imposes a new federal filing requirement for most corporations and limited liability companies (LLCs).The CTA’s purpose is to prevent the use of anonymous shell companies for money laundering, tax evasion, and other illegal purposes. But it applies to honest business owners as well as criminals.

The Taxpayer First Act of 2019, enacted July 1, 2019, authorized the Department of the Treasury and the IRS to issue regulations that reduce the 250-return requirement for 2023 tax returns. However, the e-file threshold for returns required to be filed in 2023 remains at 250. The e-file threshold of 10 is effective for returns required to be filed on or after January 1, 2024.

Pass-through entities (PTE) that qualify are generally S corporations, partnerships and multi-member LLCs which are taxed as S corporations or partnerships. C corporations, single member LLCs, sole proprietorships, and trusts (in most states) are not eligible.

The IRS is offering a way for small businesses to potentially avoid any and all interest and penalties by withdrawing their claim. Specifically, small businesses that sent in an ERC claim that is still being processed can withdraw their claim and avoid the possibility of getting a refund for which they are ineligible. If you used an outside firm to obtain your Employee Retention Credit and have concerns about whether they adequately vetted your claim, now is a good time to contact our office to take a second look.

Massachusetts taxpayers are now able to claim a state income tax deduction for charitable donations made in taxable years beginning on or after January 1, 2023. This deduction is available against part B adjusted gross income, even for taxpayers who do not itemize their deductions on their federal income tax return.

Last week, amidst continued confusion of the RMD rules of the road, the IRS announced a delay in the final regulations for inherited IRA RMDs to 2024. In addition, the agency also extended the 60-day rollover of certain plans distributions to September 30, 2023, offering relief for those born in 1951 that received a distribution before July 31, 2023 to roll that taxable distribution over into an IRA, avoiding the taxation of that amount.

The IRS has an aggressive plan for the audit of the Employee Retention Credit claims in an effort to target unscrupulous credit companies encouraging businesses to take aggressive or fraudulent positions regarding the credit. We recommend that all of our clients who did not use our office to determine eligibility for the credit look at the backup under the above list to ensure that they are prepared for any future audit.