Pennsylvania Enacts Legislation Providing an Additional State Tax Deduction for Depreciation
From the Pennsylvania Department of Revenue
CORPORATION TAX BULLETIN 2018-03 | Issued: July 6, 2018
This bulletin supersedes Corporation Tax Bulletin 2017-02
Bonus Depreciation Before Act 72 of 2018
Before Act 72 of 2018, section 401(3)1.(q) of the Pennsylvania Tax Reform Code (TRC) disallowed bonus depreciation in the year in which assets were placed in service, but allowed corporations to deduct the federal bonus depreciation over several tax years after the assets were placed in service. Specifically, section 401(3)1.(r) of the TRC provides for the recovery of the disallowed depreciation of qualified property that was claimed and allowable under section 168(k) of the IRC by providing for an additional deduction in certain circumstances. The additional deduction is equal to three-sevenths of the remaining depreciation amount, not including the depreciation claimed under IRC 168(k). Additionally, upon the disposition, sale, or transfer of the asset subject to bonus depreciation, the law allows a corporation to deduct the unused bonus depreciation.
Bonus Depreciation After Act 72 of 2018
IRS Working on a New Form 1040 for 2019 Tax Season
From the IRS | IR-2018-146 | June 29, 2018
As part of a larger effort to help taxpayers, the Internal Revenue Service plans to streamline the Form 1040 into a shorter, simpler form for the 2019 tax season.
The new 1040 – about half the size of the current version -- would replace the current Form 1040 as well as the Form 1040A and the Form 1040EZ. The IRS circulated a copy of the new form and will work with the tax community to finalize the streamlined Form 1040 over the summer.
This new approach will simplify the 1040 so that all 150 million taxpayers can use the same form. The new form consolidates the three versions of the 1040 into one simple form. At the same time, the IRS will still obtain the information from each taxpayer needed to determine their tax liability or refund.
City of Philadelphia Department of Revenue Announces Wage Tax Rate Reduction Starting July 1, 2018
The City of Philadelphia Department of Revenue announced a Wage Tax rate reduction starting July 1, 2018.
The new Wage Tax rates are as follows:
What this means for you
- Residents of Philadelphia = 3.8809% (.038809).
- Non-residents of Philadelphia who are subject to the Philadelphia City Wage Tax = 3.4567% (.034567).
Any paycheck that you issue with a pay date after June 30, 2018 must have Philadelphia City Wage Tax withheld at the new rate.
Get full details about the new Wage Tax rate.
Tax Bill This Year? Check Withholding Soon, Avoid Another One Next Year
From the IRS | IR-2018-145 | June 28, 2018
Taxpayers who owed additional tax when they filed their 2017 federal tax return earlier this year can avoid another unexpected tax bill next year by doing a “paycheck checkup” as soon as possible, according to the Internal Revenue Service.
The Tax Cuts and Jobs Act, the tax reform legislation passed in December, made major changes to the tax law, including increasing the standard deduction, removing personal exemptions, increasing the Child Tax Credit, limiting or discontinuing certain deductions and changing tax rates and brackets.
A Summer Job in Sharing Economy May Affect Taxes
From the IRS | IRS Tax Tip 2018-104 | July 9, 2018
A college student wanting to do something other than wait tables. A teacher needing to make a little extra money. A family wanting to rent out their home while they’re on vacation. These are just a few examples of taxpayers making money from the sharing economy who should consider how this income affects their taxes.
Here are some key things for taxpayers to know about participating in the sharing economy:
Tax Reform Allows People with Disabilities to Put More Money into ABLE Accounts, Expands Eligibility for Saver’s Credit
From the IRS | IR-2018-139 | June 15, 2018
People with disabilities can now put more money into their tax-favored Achieving a Better Life Experience (ABLE) accounts and may, for the first time, qualify for the Saver’s Credit for low- and moderate-income workers, according to the Internal Revenue Service.
The Tax Cuts and Jobs Act, the tax reform legislation enacted in December, made major changes to the tax law for 2018 and future years, including increasing the standard deduction, removing personal exemptions, increasing the Child Tax Credit, limiting or discontinuing certain deductions and changing tax rates and brackets.
The new law also enables eligible individuals with disabilities to put more money into their ABLE accounts, qualify for the Saver's Credit in many cases and roll money from their 529 plans -- also known as qualified tuition programs -- into their ABLE accounts.