The IRS and the Treasury Dept. have issued proposed guidance for the new Opportunity Zone tax incentive. This incentive was passed as part of the 2017 Tax Cuts and Jobs Act, and designates as Opportunity Zones, 8,761 communities in all 50 states, the District of Columbia and five U.S. territories. Investors that make appropriate investments in the zones can defer tax on almost any capital gain achieved, through 12/31/26. To qualify, an investor must have made an election after 12/31/17,
Overhead ratios can help potential donors weed out spendthrift not-for-profits. Yet a narrow focus on this one metric tends to unfairly penalize organizations making reasonable current expenditures and strategic investments. To communicate with donors that “impact” (the indirect effects of measurable outcomes) is the best measure of nonprofit effectiveness, add supplemental financial statements and break out administrative items in your annual report. Such enhancements can help you explain how expenditures result in enhanced programs that positively affect lives.
Getting extra time to file information returns will be a bit harder for some businesses. Previously, employers and others that couldn’t timely file forms W-2, 1099, 1042-S and 8027 could get automatic 30-day extensions. The IRS has issued a revised November 2018 Form 8809 (Application for Extension of Time to File Information Returns), adding boxes to check when the late forms include Forms W-2 or 1099-MISC with nonemployee compensation. The boxes explain why the extension has been requested.
The IRS clarifies the tax treatment of election worker compensation. Thousands of state and local government entities hire workers to conduct primary and general elections. The IRS is stating that compensation paid to election workers is includable as wage income for income tax purposes. And it may be treated as wages for Social Security and Medicare tax purposes. Election workers also may be reimbursed for their mileage or other expenses. To be excludable from wages,
Did you know that you may be able to enjoy two tax benefits if you donate long-term appreciated stock instead of cash? First, if you itemize, you can claim a charitable deduction equal to the stock’s fair market value. Second, you can avoid the capital gains tax you’d pay if you sold the stock. But the charitable deduction will provide a tax benefit only if your total itemized deductions exceed your standard deduction,