Shoppers may have experienced a surprising addition to their final bill on Cyber Monday: a sales tax. Due to the Supreme Court's recent decision in South Dakota v. Wayfair, states can now require a sales tax on online transactions by buyers within their state. If the state applies a sales tax in a reasonable manner, the tax would likely withstand a legal challenge.
The laws governing state taxation of online business transactions is in the process of a major evolution. The change began with a holding from the Supreme Court of the United States (SCOTUS) in June of 2018.
Businesses can use IRS tax code Section 179 to deduct the purchase price of certain equipment or software for the current tax year. There are some limitations to this deduction.
The United States government requires American taxpayers report foreign assets to the Internal Revenue Service (IRS). A failure to meet this obligation can result in hefty monetary penalties and fines as well as potential imprisonment. The severity of these penalties can increase as time passes without compliance. As such, any taxpayers that have yet to come into compliance are wise to do so promptly.
The Internal Revenue Service (IRS) has attempted to simplify the process used to audit partnerships. As discussed in a previous post, the rules that govern partnership audits changed as of January 1, 2018. However, the IRS does not require all partnerships to follow these new rules.
As of January 1, 2018, the rules that govern audits of partnerships have changed. In the past, the Tax Equity and Fiscal Responsibility Act (TEFRA) applied to these audits. The law required the Internal Revenue Service (IRS) to allocate the audit adjustments within partnerships amongst the partners.
Whether it is a financial transaction, an investment or real estate purchase, nearly every transaction is taxed. Tax planning involves mitigating risk and liabilities to find the most economically viable business solution. Tax law is highly specialized and failing to consider tax consequences is detrimental to business growth and development.