Western CPE Blog
Breaking tax and accounting news and analysis from the experts at Western CPE.
IRS Drops Guidance on Transferring Clean Energy Credits
By: Happy Friday, tax pros. In case you missed the major guidance drop out of the IRS this week, temporary and proposed regulations as well as FAQs were issued on June 14 that address direct-pay elections and transferability of certain clean energy tax credits under the Inflation Reduction Act (IRA) (P.L. 117-169) and the CHIPS and Science Act of 2022 (P.L. 117-167). The package of guidance on the Inflation Reduction Act of 2022 (P.L. 117-169) and the CHIPS and Science Act of 2022 (P.L. 117-167) includes: Proposed regulations addressing applicable entities that earn certain clean energy credits and make an …
House GOP Revs Tax Talk Engine with Release of Individual, Business Tax Package
House Republicans have revved the engine on congressional tax talks this year by releasing a trio of bills for an individual and business tax package. The following three bills, released on June 9, make up the American Families and Jobs Act package and serve as the starting line for this year’s congressional tax negotiations: Tax Cuts for Working Families Act (H.R. 3936), Small Business Jobs Act (H.R. 3937), and Build It in America Act (H.R. 3938). A Look Under the Hood at the American Families and Jobs Act Package Generally, taking a quick look under the hood shows us that …
Congress Extends Debt Limit, Cuts IRS Funding
Congress has approved a bipartisan debt limit bill, which avoids a federal government default and takes a sizeable bite out of the IRS’s much-needed makeover funding. See what I did there? The Fiscal Responsibility Act of 2023 (H.R. 3746) now heads to President Biden’s desk where he is expected to sign it as early as today. The bipartisan bill cleared the Senate on June 1 by a 63-36 vote. The House approved the measure by a 314-117 vote on May 31. Notably, the bill will suspend the federal debt limit through January 1, 2025, and immediately rescind $1.4 billion of …
Supreme Court Backs IRS’s Summons Power Notice Exception
No Notice, No Problem The U.S. Supreme Court has backed the IRS on a third-party notice exception to its summons power of financial records. Last week, the high Court unanimously held in Polselli v. IRS, No. 21-1599 (S. Ct. May 18, 2023), that the IRS in efforts to collect an assessed tax liability has authority to summon banking and other records under Internal Revenue Code § 7609(c)(2)(D(i) without issuing notice to third parties.In other words, the IRS can issue a summons to gain access to sensitive third-party financial information without notice to the account holder, and yes, even when the IRS …
CALIFORNIA CORNER: Newsom Signs Retroactive Student Tax Relief Bill
California Governor Gavin Newsom has signed a retroactive tax relief bill for current and former students impacted by economic hardships during the COVID-19 pandemic. A.B. 111, signed by Newsom on May 15, makes certain student loan debt relief and other pandemic relief provided to students through postsecondary education institutions tax free at the state level. Specifically, the temporary provisions will: exclude from an individual’s gross income student loan discharges for taxable years beginning on or after January 1, 2021, and before January 1, 2026, in conformity with the federal exclusion under the American Rescue Plan Act; exclude from an individual’s …
Capitol Hill Connection: Werfel in Hot Seat Before Senate Finance Committee
Happy first Friday after Tax Day, tax pros. You made it. And if you don’t read this because you refused to check your email today, I can’t blame you. But there was a noteworthy development on Capitol Hill this week, and as your “boots on the ground” here in Washington, D.C., let me fill you in. Werfel Sits in Congressional Hot Seat IRS Commissioner Danny Werfel felt the heat from lawmakers this week during an April 19 Senate Finance Committee (SFC) hearing examining the IRS’s budget and 2023 tax filing season. This was Werfel’s first time testifying before Congress since …
Insider Strategies to Get More Accounting Clients
By: Western CPE
Surefire Insider Strategies to Get More Accounting Clients For accounting firms, it can be difficult to know how to find new accounting clients and retain them. The teams that thrive in today’s competitive landscape—and the ones that will grow in the years to come—are the ones that work smarter, modernize their learning, and hustle harder. Here we’ll discuss surefire strategies to help you get more clients for your accounting firm. We’ll look at how to optimize search engine results (SEO), leverage social media presence, and offer discounts or free service trials, as well as other insider strategies that can help …
Technical vs Non-Technical CPE: What’s the Difference?
By: If you’re reading this article, you’re probably familiar with the terms CPE and CE. If by chance you are not, we’ll start there. Once we’ve hit the basics, we’ll explain the two broad categories of CPE: technical CPE and non-technical CPE. What is the difference between CPE and CE credits? Continuing professional education (CPE) and continuing education (CE) are interchangeable terms that refer to the educational requirements professionals acquire to maintain, improve, and enhance their skills and knowledge. Though the concept is the same, the terminology differs in:Industry usageCPE is more commonly used in heavily-regulated industries, such as accounting, law, …
Need-to-Know California LLC Fees: Your California LLC Guide:
Thinking of starting your own Limited Liability Company, better known as an LLC? There are California LLC fees associated with that. If you plan on starting a California business with a California LLC, some of these considering factors affect how much you’re going to spend.This convenient handbook should serve as a helpful guide to walk you in the right direction of your new California business. Owning a California LLC will require the following: the California LLC filing fees, the California LLC fee, business license, and other optional or additional fees.Fear not the fees, and we won’t forget to tell you …
Which states have the highest income tax in the US?
There are many factors people consider when choosing a place to live, including location, weather, housing, pace of life, and affordability. Another factor some may consider is the income tax rate. Though there are various types of taxes in every state, the amount of income tax you’ll pay as a resident can have a significant impact on your overall financial situation and quality of life.Some states in the U.S. have lower income tax than others, and nine states have no income tax at all. In most cases, that money is made up in a higher sales tax or a higher …
IRS: Taxpayers Who Reported Certain 2022 State Refunds as Taxable Should Consider Filing Amended Return
The IRS announced today that taxpayers who filed their federal income taxes earlier in this year’s filing season AND reported certain state 2022 tax refunds as taxable income should consider filing an amended return. To Tax or Not to Tax: That WAS The Question You might recall that on the heels of a February Procedurally Taxing post, the IRS released a statement noting that it was aware of taxpayer uncertainties involving special tax refunds or payments made by states during 2022 and was working to determine whether those payments are subject to federal tax. On February 3, the IRS recommended against …
Know Your California Income Tax Brackets
It’s important to understand the income tax bracket you fall into within your state so you can pay your state income taxes accordingly. If you’re a California taxpayer, your state income tax has some of the highest rates in the United States. California state taxes aren’t the same for everyone, and a few different factors determine which CA tax bracket you fall into. California income taxes are divided into nine income tax brackets. Where do you stand in the CA tax brackets? Read on to find out. Who has to file California state taxes? Let’s start with the basics. Are you subject …
9 States with No Income Tax
Oh, the joy of receiving a paycheck without income tax taken out. Though it may sound like a dream to some, it is the reality for those in 9 out of the 50 states. It’s not all cut and dry, though. Though these nine U.S. states don’t take state income tax out of personal income, their actual tax burden can be more complex. The Nine States With No Income Tax: AlaskaFloridaNevadaNew HampshireSouth DakotaTennesseeTexasWashingtonWyomingAnd there you have it, the nine states whose residents are free of income tax. But, before we get carried away, what’s the catch? The blue pop-out states …
In Case You Missed It: Clean Vehicle Credit Guidance, Irrevocable Trusts, and Disaster Relief
Happy Friday, tax pros. Once again, we’re wrapping up the week by getting some of the most noteworthy tax-related developments on your radar in case, you know, you missed it. March 31: Clean Vehicle Credit guidance – critical mineral and battery component requirements. The IRS has issued much anticipated proposed regulations (REG-120080-22) related to certain requirements that must be met for critical minerals and battery components for the new clean vehicle credit under the Inflation Reduction Act (IRA). As the IRS notes in IR-2023-64: The critical mineral and battery component requirements will apply to vehicles placed in service on or …
California Corner: Revised Instructions for 2022, 2023 Pass-Through Entity Form 3893
The California Franchise Tax Board (FTB) in an e-file news release today is aiming to clarify its revised instructions for the 2022 and 2023 Form 3893 (Pass-Through Entity Elective Tax Payment Voucher) released on March 23. Revised 2022, 2023 Form 3893 Instructions: “PTEs must make all elective tax payments either by using the free Web Pay application accessed through the FTB’s website or by using form FTB 3893,” the revised instructions state. “This includes elective tax payments made with the entity’s return. The elective tax payment cannot be combined with the entity’s other tax payments.”According to the FTB:The 2022 and …
NFTs, Form 1099-K Updates, and More
Happy Friday, tax & accounting pros. In an effort not to blow up your inbox during busy season, we’ve been lyin’ low lately. But we’ll send you off to your weekend (you’ll probably still be working) by getting a few noteworthy developments that occurred this week on your radar in case you missed them.March 24: FinCEN provides beneficial ownership information reporting guidance. Today, the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) published its first set of guidance materials to aid the public in understanding recently issued final regulations, effective January 1, 2024, that require many corporations, limited liability companies, and …
S corporations: Trusts Are Trickier Than You Might Imagine
By: Among the many foot faults with S corporations are the myriad of seemingly disconnected rules when trusts become shareholders. There are only a select few types of trust that are eligible to hold shares in S corporations:Grantor trusts during the grantor’s lifetime and for two years thereafter.Deemed grantor trusts, during the beneficiary’s lifetime and for two years thereafter.Testamentary trusts, for two years after funding.Qualified Subchapter S Trusts (QSST requires election).Electing Small Business Trusts (ESBT requires election).Voting trusts. QSST and ESBT Seem to Have the Most Hazards Of these trusts, the QSST and the ESBT seem to have the most hazards. …
Biden Administration Spotlights Tax Priorities in FY 2024 Budget Proposal
For those of us in the tax world residing in the D.C. area, the last several days have been a non-stop party. The theme? The Biden Administration’s fiscal year 2024 budget proposal, which would increase taxes by over $4.5 trillion over the next decade. If you’re not on Capitol Hill or a tax pro elsewhere who also gets a little amped up about these things, I’ll tell you a bit about what you’ve missed. Don’t worry, getting excited isn’t mandatory; professional interest will suffice. Tax Policy Proposals Tend to Stick Around a While Before we take a first look, it’s …
Mindfulness for Accountants: What is Mindfulness?
By: Mindfulness continues to gain popularity with working professionals worldwide, especially in the United States. When I made the decision to launch the Mindful-CPA website and initiative back in early 2020 before the pandemic, I did so with the intention to provide the public accounting industry with a tool for mental wellness. The pandemic hit us a few months after the launch of Mindful-CPA, and this greatly accelerated the interest and intrigue into Mindfulness in a demanding industry like ours. I view mindfulness as a tool that we as accounting professionals can add to our toolkit to bring balance, creativity, and …
How to Study for the CPA Exam: Top 10 CPA Exam Study Strategies
It’s time for you to take the Uniform Certified Public Accountant Examination, better known as the CPA Exam. You’ve have chosen to become a Certified Public Accountant (CPA), met the education requirements, gained relevant experience, and completed the application process. Your next step is to prove you have what it takes to join the world of accounting and auditing. Your hard work has led you to this point, and it’s time to cross the finish line. Four sections, 276 multiple-choice questions, 28 task-based simulations, and three writing portions now stand in your way of you and your CPA certification. According …