The Tax Cuts and Jobs Act (TCJA) introduced many changes in late 2017, but many provisions were temporary, with an approaching expiration as early as January 1, 2026.  The good news is that not everything will change. One of the most significant and lasting changes introduced by the TCJA was the restructuring of the corporate tax rate. Prior to the TCJA, C-corporations faced a graduated tax rate structure with a top rate of 35%. The TCJA implemented a flat 21% tax rate, regardless of the amount of corporate taxable income. Unlike many other provisions of the TCJA, this change is permanent ..read more

The Alternative Minimum Tax (AMT) was designed to set a baseline for the proportion of taxes a taxpayer must pay, regardless of the deductions or credits claimed under standard U.S. tax regulations. Unlike the regular income tax system, the AMT operates with its own rules, recalculating income by adding back certain tax preference items to adjusted gross income. This approach disallows specific deductions, imposing a tax on a broader base of income. While initially targeted at high-income earners, the reach of the AMT has expanded over the years, ensnaring a broader spectrum of taxpayers. Indi ..read more

The IRS’s newly unveiled strategic operating plan is set to reshape the landscape for wealthy individuals, large corporations, and complex partnerships. By 2026, audit rates for these groups are projected to rise significantly.  It’s important to understand and prepare for a more rigorous audit environment to safeguard your financial interests and ensure compliance with the evolving standards. In this article, we’ll provide insights and strategies to manage the impending changes. Breaking down the IRS’s new audit plan The strategic operating plan reflects the IRS’s enhanced capacity ..read more

Smart financial planning for college: a parent’s guide As parents, we all want the best for our children, including the opportunity for a higher education. But with the ever-rising costs of college, many families are concerned about how to afford it, especially those who are unlikely to qualify for need-based financial aid.  We all know that a college education is a significant investment. Even in 2024, the average cost of a four-year public in-state degree can easily exceed $100,000. And that doesn’t include textbooks, supplies, and other incidental expenses.  Our goal today is to e ..read more

Authored by RSM US LLP Executive summary: Introduction to CODI Cancellation of Debt Income (“CODI”) can have significant tax implications for various entities, depending on their classification for federal income tax purposes, as well as their solvency and bankruptcy status. Understanding the tax treatment of CODI for partnerships, S corporations, and C corporations is vital for taxpayers to make well-informed decisions and optimize their tax positions. With analysis and illustrative examples, this article provides an introductory guide for navigating CODI in different entity structures. Gene ..read more

In the corporate world, the phrase “holding company” often brings to mind visions of large conglomerates overseeing numerous businesses. While often associated with massive corporations, holding companies are not exclusive to them.  Holding companies offer numerous advantages, from tax efficiency to liability protection and privacy. However, these advantages come paired with challenges and complexity. Their strategic use can help entities achieve specific operational and financial goals, but they require diligent planning and keen legal and financial insight.  What is a holding compa ..read more

The IRS recently issued Notice 2024-35, which provides significant relief for certain beneficiaries of inherited IRAs. This notice waives the requirement for these beneficiaries to take required minimum distributions  (RMDs) for 2024 if they are subject to the SECURE Act’s 10-year payout rule.  Inherited IRA distribution rules Before the SECURE Act of 2019, beneficiaries of inherited IRAs could spread out their withdrawals over their lifetime, a strategy often referred to as the “stretch” IRA. This approach allowed beneficiaries to lower their annual tax liability. However, the ..read more

Authored by RSM US LLP Executive summary: Distribution options Employers establish retirement plans to provide a vehicle to set aside monies, whether funded by the employee or the employer, to be preserved for a retirement benefit. The rules related to when an employee can take a distribution from their retirement plan account are restrictive considering the goal of preserving the retirement funds. SECURE 2.0, enacted on Dec. 29, 2022, included provisions that loosen some of the restrictions on withdrawals from a retirement plan. The additional options available give plan sponsors flexibility ..read more

Authored by RSM US LLP Executive summary The IRS released new guidelines regarding the tax treatment with respect to Department of Energy (DOE) Home Energy Rebate Programs funded by the Inflation Reduction Act of 2022. According to the guidelines, homeowners who receive rebates should consider them as purchase price adjustments which are not includible in their gross income. On the other hand, businesses that receive rebates in connection with the sale of goods or provision of services to a purchaser must report them as taxable income. Additionally, those who are eligible for DOE rebates and ..read more

For many retirees, downsizing their homes isn’t just a choice—it’s a strategic move toward a more manageable and financially secure retirement. Whether it’s to reduce living expenses, adapt to a more accessible living environment, or simply adjust to a life that no longer requires as much space, the decision to downsize can be both practical and liberating. After children leave the nest and the demands of a larger home become less appealing, the lure of a simpler lifestyle grows stronger.  But there’s another aspect to consider: the capital gains presented by the equity built up in your h ..read more