Benefits of IRA Qualified Charitable Distributions

Benefits of IRA Qualified Charitable Distributions

With the passage of the Tax Cuts & Jobs Act (TCJA), many taxpayers will no longer itemize their deductions, and as such, will not be able to take advantage of tax savings through charitable contributions. The qualified charitable distribution (QCD) is an attractive tax planning tool for senior taxpayers looking to meet their individual retirement account (IRA) required minimum distributions while making a tax deductible charitable contribution.

QCDs can benefit those taking the standard deduction if they choose to make their charitable contributions directly through an IRA distribution. Thus QCDs may lead to significant tax savings.

Recognizing that taxpayers may want to explore the option of using QCDs, there are numerous requirements, such as limitations on the QCD amount that may be excluded from gross income in a tax year, the types of IRAs that distributions can be made from, the manner in which the distribution should be made, and the required timing of the distribution.

Other noteworthy considerations include carryover provisions for unused portion of the QCD allowed for a taxpayer for a tax year, whether contemplated Roth conversions still make sense to them in the long run, and the state income tax implications of a QCD.

This tax planning tool may have additional impacts on your tax filings, such as lessening the effect of phase outs and limitations on other benefits. Our experienced professionals and advisors at Gramkow Carnevale Seifert & Co., LLC can be a valuable asset to determine how QCDs may impact your individual tax planning.

Did You Know?

Most of our full-time tax and accounting staff are highly involved members in many accounting associations such as American Institute of Certified Public Accountants (AICPA) and New Jersey Society of Certified Public Accountants (NJSCPA.)

New Jersey Tax Amnesty Update

As a follow up to our August 2018 e-mail blast, we want to provide an important update on the status of the New Jersey Amnesty program.

The New Jersey Division of Taxation recently announced the period of the tax amnesty program will be 60 days, beginning on November 15, 2018 and ending on January 15, 2019. Accordingly, please be watchful for any notices you receive from The Division of Taxation and forward to us so we can review to determine liability exposure and what the best course of action is to respond.

Should you have any questions or wish to speak to a team member, please don’t hesitate to call us at 201-599-0008.

New Jersey Sales Tax Audits

New Jersey Sales Tax Audits

Due to the recent Supreme Court ruling the case of Wayfair vs South Dakota, we foresee a large rise in the number of sales tax audits.
In short, the Supreme Court ruling on the case Wayfair vs South Dakota overturned a case from 1992. This new ruling states that any sales created over the internet will be subject to sales tax in each state where the product is sold, even if you or your company does not have a physical presence in that state.

For example, if your company is physically placed in New Jersey, and you sell to a client who is in Pennsylvania, your company is now required to collect sales tax, for each product sold, for the state of Pennsylvania.

While this example pertains to New Jersey, this is applicable to all states that impose state & local sales tax. The exception states that do not impose a sales tax are Alaska, Delaware, Montana, New Hampshire and Oregon. If you sell to any state or locality imposing sales tax, you will be required to charge, collect, remit, report and file sales tax returns.

Receiving an audit notice can raise a lot of questions and uncertainty, but we here at GCS have the knowledge, resources, and experience, in various states, to help assist and guide all of our clients throughout the sales tax audit process to minimize sales tax liabilities and exposure.
Please don’t hesitate to contact us with questions or concerns or if you would like to meet with us to discuss this issue or any of your other financial or tax needs.

Did You Know?

Gramkow, Carnevale, Seifert, & Co., LLC provides tax and accounting services to clients from all over the country and the world.