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with a tax advisor who will guarantee an accurate tax return for your unique situation.*
41-18 Crescent St., Long Island City, NY 11101
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47-46 Vernon Blvd Second Floor
Long Island City, NY 11101
T: 718-707-0955 • F: 718-707-0959
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SAVIGNANO
accountants & advisors
ACCOUNTING AND TAX SERVICES THAT BENEFIT YOUR PERSONAL
JOHN SAVIGNANO
CPA, CGMA
AND BUSINESS NEEDS
• Multiple LIC Office Location • One Stop Shopping
• Over 25 Years of Professional Experience
• Special Offers and Promotions Available
• All Services Guaranteed
OUR SERVICES INCLUDE:
For Individuals…
• Income Tax
• Tax Planning
• Audit Defense
• Bookkeeping
• Insurance
• Financials
• Estates/Trusts
• Net Worth Statements
• Budgeting
• Offer-In-Compromise
For Businesses…
• Income Tax
• Sales Tax
• Payroll Tax
• Retirement
• Accounting
• Investments
• Audit Defense
• Tax Planning
• Valuations
• Formation/Structures
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Our Certified Public Accountants
are here to serve clients in a variety of industries. Whether you are looking for tax preparation
services, risk management advice, or assistance with a retirement plan, the team at
SAVIGNANO accountants & advisors is here to help.
47-46 Vernon Blvd., 2nd Fl. LIC, NY 11101
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TAX TIPS
Taxpayer Advocate:
IRS Will Need at Least a Year
to Work Through Shutdown
Consequences
BY JOHN SAVIGNANO, CPA
Nina E. Olson, the National Taxpayer Advocate, said that the IRS will
need a year or more to recover from the record-long government
shutdown, noting all the work that went undone over those 35 days,
according to the Washington Post. Speaking to congressional staffers, she
said that the IRS has a backlog of 5 million unanswered correspondences, a
swift doubling from the 2.5 million just two weeks ago. Beyond this, the
shutdown also forced the IRS to delay training new employees, including
2,000 who were supposed to be able to answer taxpayer questions over the
phone, and imperiled the agency's IT plans, with the Post saying that the
agency has lost about 25 IT tech staff per day since the shutdown began,
many of whom simply left the IRS for other jobs. Further, plans to issue
guidance and regulations on the Tax Cuts and Jobs Act provisions have also
been delayed, and given all the other work to recover, now that the government
has (for the time being) reopened, further issuance will likely be
delayed. Overall, Olson believes that it will take between 12 to 18 months
for the IRS to return to normal operations. This is assuming the government
does not shut down again, which the White House has hinted at
doing if future negotiations with Democrats go poorly.
Service Businesses That Qualify for the 20% QBI Deduction
One major provision of the law known as the Tax Cuts and Jobs Act
(TCJA), is a new tax deduction for passthrough entities (S corporations,
partnerships, and sole proprietorships). The deduction generally provides
owners, shareholders, or partners a 20% deduction on their personal tax
returns on their qualified business income (QBI). Various limitations apply
based on the type of business operated and the amount of income the
business has.
Under the new rules, this deduction does not apply to certain enumerated
SSTBs if the taxpayer’s taxable income is above certain threshold amounts.
The threshold amounts are $315,000 for taxpayers filing jointly and
$157,500 for all other taxpayers, with a deduction phaseout range, or
limitation phase-in range, of $100,000 and $50,000, respectively, above
these amounts.
SSTBs are broken into two distinct categories:
1. Trades or businesses performing services in the fields of health, law,
accounting, actuarial science, performing arts, consulting, athletics, financial
services, brokerage services, or any trade or business where the principal
asset of that trade or business is the reputation or skill of one or more of
its employees, however, the TCJA specifically excluded engineering and
architecture; or
2. Any trade or business that involves the performance of services that
consist of investing and investment management, trading, or dealing in
securities, partnership interests, or commodities.
Before continuing this discussion, two points need to be made clear. First,
if taxpayers are below the threshold amounts, they are eligible for the 20%
deduction regardless of whether their business is an SSTB. Second, the
SSTB classification applies to the business regardless of whether the
taxpayer is actively or passively involved in it.
To sum up the reputation and skill provision, it targets celebrities and
public figures who make their living in the public eye. This was a welcome
relief for many taxpayers, as it was uncertain how expansive this definition
would be.
John Savignano is a partner with Savignano Accountants & Advisors
located at 47-46 Vernon Blvd., Second Floor, in Long Island City. If you have
any questions or require additional information, please call John at
718-707-0955.
/www.savignano-cpa.com
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