September highlights from The MWE Advisor: Calculating W-2 wages for limitations on the qualified business deduction; The IRS issues proposed guidance on state and local tax limitations.
Calculating W-2 Wages for Limitations on the QBI Deduction
Some parts of the Tax Cuts and Jobs Act simplify the tax code — but others add complexity. When it comes to the new qualified business income (QBI) deduction for pass-through entities, the devil is in the details. Recently issued IRS proposed regulations help businesses understand how to calculate the QBI deduction. Here, we cover the limitations based on W-2 wages and the basis of qualified property.
IRS Issues Proposed Guidance on Controversial SALT Limitation
The Tax Cuts and Jobs Act limits itemized deductions for state and local taxes (SALT). To bypass this limitation, some states have approved charitable contribution “workaround” legislation. Recently, the IRS issued proposed regulations that block these workarounds by generally allowing taxpayers to deduct contributions only after subtracting the value of any state tax credits. Here are the details.