IRS issues final regulations and other guidance on business interest expense deduction limitation
https://www.irs.gov/newsroom/irs-issues-final-regulations-and-other-guidance-on-business-interest-expense-deduction-limitation
The Internal Revenue Service issued final regulations (PDF) regarding the provision of the Tax Cuts and Jobs Act that limits the deduction for business interest expense, including basic statutory amendments made by the CARES Act.
For tax years beginning after December 31, 2017, business interest expense deductions are generally limited to the sum of:
the taxpayer's business interest income;
30 percent (or 50 percent, as applicable) of the taxpayer's adjusted taxable income; and
the taxpayer's floor plan financing interest expense.
The business interest expense deduction limitation does not apply to certain small businesses whose gross receipts are $26 million or less, electing real property trades or businesses, electing farming businesses, and certain regulated public utilities. The $26 million gross receipts threshold applies for the 2020 tax year and will be adjusted annually for inflation.
A real property trade or business or a farming business may elect to be excepted from the business interest expense limitation. However, taxpayers cannot claim the additional first-year depreciation deduction for certain types of property held by the electing trade or business.
Taxpayers use Form 8990, Limitation on Business Interest Expense Under Section 163(j), to calculate and report their deduction and the amount of disallowed business interest expense to carry forward to the next tax year.
Along with the final regulations, the IRS today issued the following additional items of guidance related to the business interest expense deduction limitation.
Proposed Regulations (PDF) that provide additional guidance on various business interest expense deduction limitation issues not addressed in the final regulations, including more complex issues related to the amendments made by the CARES Act. Subject to certain restrictions, taxpayers may rely on some of the rules in these proposed regulations until final regulations implementing the proposed regulations are published in the Federal Register. Written or electronic comments and requests for a public hearing on these proposed regulations must be received within 60 days of date of filing for public inspection with the Federal Register.
Notice 2020-59 (PDF) contains a proposed revenue procedure that provides a safe harbor allowing taxpayers engaged in a trade or business that manages or operates qualified residential living facilities to treat such trade or business as a real property trade or business solely for purposes of qualifying as an electing real property trade or business. Writt
...
https://www.youtube.com/watch?v=XzcW5q76lVw
IRS Tax Tip
Tips for taxpayers who work in the gig economy
https://www.irs.gov/newsroom/tips-for-taxpayers-who-work-in-the-gig-economy
https://accountinginstruction.info/
The gig economy allows people to earn income by using technology to arrange transactions. This could include performing rideshare services or deliveries, renting out property, selling goods online, or providing freelance work. Often, customers and providers of goods or services are brought together through a digital platform on an app or website.
It's important for all gig economy workers to understand their tax obligations.
Here are some things taxpayers should remember:
They must report all income, even if the income is:
From part-time, temporary, or side work
Not reported on a Form 1099-K, 1099-NEC, 1099-MISC, W-2, or other information return.
Paid in the form of cash, property, goods, or virtual currency
Taxpayers may also be required to make quarterly estimated income tax payments and pay self-employment tax.
While providing gig economy services, it is important that the taxpayer is correctly classified.
It is critical that business owners correctly determine whether the individuals providing services are employees or independent contractors.
Taxpayers can use the worker classification page on IRS.gov to determine how they are being classified.
Independent contractors may be able to deduct business expenses, depending on tax limits and rules. It is important for taxpayers to keep records of their business expenses.
It's important for taxpayers to pay the right amount of taxes throughout the year to avoid owing when they file.
An employer typically withholds income taxes from their employees' pay to help cover income taxes their employees owe.
Gig economy workers, who are not considered employees, have two ways to cover their income taxes:
If they have another job as an employee, gig workers can submit a new From W-4 to their employer to have more income taxes withheld from their paycheck.
Make quarterly estimated tax payments to help pay their income taxes throughout the year, including self-employment tax.
The Gig Economy Tax Center on IRS.gov answers questions and helps gig economy taxpayers understand their tax responsibilities.
...
https://www.youtube.com/watch?v=0oLCefM5RbQ