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Checkpoint Edge

What’s Hot on Checkpoint for Federal & State Tax Professionals?

Checkpoint Editorial Team  

Checkpoint Editorial Team  

Navigate the latest trends and emerging issues with new resources and expert guidance from Checkpoint Edge.

In this edition, we take a look at foreign tax credit regulations; year-end tax planning; advising lodging platforms on their sales tax obligations; and recent regulations in New Jersey and Kentucky.

Please note that access to the resources below requires a Checkpoint subscription except as otherwise stated. Not yet a subscriber? Sign up for a free 7-day trial today!

 

New Checklist to Determine Creditability of Foreign Income Taxes

Who needs to know:  U.S. Multinational corporations and individuals subject to tax in foreign jurisdictions and their tax practitioners

Current-year changes in regulations governing the ability of taxpayers to take credits against their U.S. tax liability for taxes paid on the same income in foreign jurisdictions (“creditability”) may mean that certain foreign taxes that were previously creditable no longer are.

  • Checkpoint features a new Checklist that helps customers with the complex analysis required under the Regulations to determine whether taxes paid to a foreign country are creditable for U.S. tax purposes.
  • Foreign taxes previously creditable for U.S. tax purposes may no longer be so under recent Regulations, which are complex and pose significant compliance challenges.

Checkpoint Edge resources:

Federal Tax Coordinator: ¶10013.1. Checklist for Determining Creditability of Foreign Income Taxes.

Federal Tax Coordinator Analysis: For determining creditability of a foreign tax, see FTC 2d/FIN ¶O-4200 et seq. For treaty issues, including disclosure of treaty-based return positions, see FTC 2d/FIN ¶ O-15000 et seq.

Catalyst: 2110:100 Overview of the Foreign Tax Credit.

PPC’s Federal Tax Compliance Library: Key Issue 21D: Claiming the Foreign Tax Credit.

 

Confidently advise clients on the new foreign tax credit regulations with a 7-day trial of Checkpoint Edge!

 

2022 Year-end Tax Planning for Individuals and Business

Who needs to know: Accounting Firms

With 2022 rapidly drawing to a close, tax professionals would be wise to devote their attention to long-term tax planning. Due to the uncertain economic climate, the expiration of some provisions, and the introduction of new provisions by the Inflation Reduction Act of 2022, some potential planning opportunities have arisen, such as:

  • Look for ways to defer taxable income;
  • Consider tax loss harvesting; and
  • Plan capitalized business asset purchases.

Tax professionals should collaborate with clients to create a tax planning strategy that is unique to each client’s needs. To establish long-term client relationships, it is critical to understand which planning opportunities are available to which clients and how those opportunities will benefit the client.

Checkpoint Edge resources:

Checkpoint Year-End Tax Planning Guide

PPC TAM-2182: 2022 Year-end Tax Planning Letters for Clients

 

New Jersey & Kentucky Adopt New Regulations

Who needs to know: Accounting firms, corporates

The New Jersey Division of Taxation has adopted new regulations in connection with combined returns, combinable captive insurance companies, and the sourcing of receipts derived from customers within New Jersey. The Kentucky Department of Revenue has issued guidance concerning the state’s new 6% motor vehicle / ride share excise tax which takes effect January 1, 2023.

Keeping track of new regulations and other administrative guidance can be a challenge for busy tax return preparers. The news items below summarize the relevant impacts for taxpayers.

 

Intermediary Platforms: Tips for Parsing Their Sales Tax Duties Across the States

Who needs to know: Accounting firms; law firms; other tax advisors; corporates

Services such as lodging, passenger transportation, meal delivery, and similar transactions are increasingly offered through online intermediary platforms and apps that may have sales and use tax collection and remittance duties through nexus with a state.

  • This area is rapidly developing and often confusing because of states’ varying approaches. The article below outlines common sales, use, and occupancy tax (collectively, transaction tax) considerations for platforms facilitating lodging transactions, including online travel companies and short-term rental platforms. The article details the basic issues that can arise for intermediary platforms and their tax advisors, and includes practice tips and advisory considerations. To dive deeper into these issues, users can find a detailed state-by-state discussion in the resources below.

Checkpoint Edge resources:

Lodging Intermediary Platforms: Tips for Parsing their Sales Tax Duties Across the States, Checkpoint State Tax Updates.  [read this article without a subscription!]

Checkpoint Catalyst Topic #1051, Sales Tax: Electronically Delivered Goods and Services

 

Easily analyze complex transactions across multiple jurisdictions with a 7-day trial of Catalyst on Checkpoint Edge!

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