William Byrnes' Tax, Wealth, and Risk Intelligence

William Byrnes (Texas A&M) tax & compliance articles

TaxFacts Intelligence: Wednesday, April 20

Posted by William Byrnes on April 20, 2022

The Texas A&M graduate program for tax, wealth, and risk management is accepting applications from financial professionals with at least five years of industry experience for the summer. Even though our graduate program has grown to over 750 enrollment, the enrollment for a course section is between 20 and the maximum of 30 so that each student receives meaningful feedback throughout the course from the full-time academic faculty and renowned professional case study leaders, and each other via teamwork and peer review. Learn more about how we educate and position the industry’s leaders: https://law.tamu.edu/distance-education

Prof. William H. Byrnes         Robert Bloink, J.D., LL.M.

Although many tax changes have not made it through the Democrat’s discussions for a spring or summer final bill to show voters before November’s election, two that seem to have traction are the proposals to impose a minimum tax on corporations with $1 billion in profits and another to impose a minimum tax on wealthy individuals (basically, require mark to market of assets each year, like a wealth tax). Now that tax season is over, time to turn our attention to inflation-adjusted 2022 limits such as health FSAs and qualified transit benefits.

2022 Contribution Limits for FSAs, Transportation Benefits. In 2022, taxpayers will be entitled to contribute a maximum of $2,850 to their health FSAs (up from $2,750 in 2021).  The health FSA carryover amount also increased to $570 (up from $550 in 2021).  For dependent care FSAs, the annual contribution limit will be $5,000 per married couple in 2022 (the limit was temporarily increased to $10,200 for 2021).  The limit on tax-preferred transit/parking benefits also increased from $270 to $280 per month in 2022.  Employers who offer these types of benefits should update their plan documents and communicate the increased limits to employees.  For more information on the types of tax-preferred transportation benefits that employers can offer employees, visit Tax Facts Online. Read More

IRS Updates FAQ on Unemployment Compensation Exclusion and 2020 Tax Credit Eligibility The IRS recently updated its FAQ for the 2020 unemployment compensation exclusion.  As background, many taxpayers file their 2020 income tax returns before the IRS announced that $10,200 in unemployment compensation would be excluded from 2020 taxable income. Because the IRS automatically made the changes to exclude $10,200 in unemployment compensation from taxpayers’ 2020 income, many clients may be eligible for the additional child tax credit or the earned income credit. The IRS announced that it is sending CP08 and CP09 notices to individuals who did not claim the credit on their return but may now be eligible for it. The notices will be sent in November and December of 2021. Receiving the notice is not a confirmation that the taxpayer is eligible for these tax credits—and taxpayers are not required to file an amended return to claim the tax credits if they simply reply to the CP08 notice or CP09 notice. The IRS will calculate the amount available and treat it as an overpayment.  For more information on the available tax credits, visit Tax Facts Online. Read More

Understanding the New Corporate Profits Minimum Tax Proposal

The proposal to revive the corporate alternative minimum tax, that the Tax Cuts & Jobs Act repealed, is now oriented for corporations with at least $1 billion in profits (as reported to shareholders). These corporations would need to pay at least a 15 percent minimum tax on those profits.  If enacted, the tax would be effective in tax years beginning after 2022. The tax would apply to corporate taxpayers (but not to S corporations, RICs or REITs) that satisfy certain annual minimum income requirements over a three-year period.  Income of controlled foreign corporations and non-consolidated entities would also be included—and any deductions for U.S. or foreign income taxes would be removed in calculating income.  It’s estimated that this tax would apply to about 200 corporations and raise hundreds of billions of dollars in revenue.  Like many taxes that start as a thin edge of the wedge, this one may expand to include more taxpayers and at a higher rate, over time. For more information on the current corporate income tax structure, visit Tax Facts Online. Read More

Look in your Tax Facts Online app for our continuing analysis of 2022 legislative and regulatory updates, weekly intelligence, and the impact on planning for a client’s wealth preservation and growth.

Wealth & Risk Management Degree for Industry Professionals – learn about the graduate degree here: https://law.tamu.edu/distance-education

Texas A&M, operating budget of $9.6 billion (FY2022) and capital budget of $1.9 billion, is #1 for U.S. public universities, one of only 60 accredited U.S. universities of the American Association of Universities (R1: Doctoral Universities – Highest Research Activity) and one of only 17 U.S. universities that hold the triple U.S. federal grant of Land, Sea, and Space! The law school, ranked in the 1st tier, has the #1 bar passage in Texas, and #1 for employment in Texas (and top 10 in U.S.)

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