538 tagged with "Tax"
Tax strategies, planning, and compliance for individuals and businesses
Section 4960: The 21% Excise Tax on Nonprofit Executive Pay After OBBBA's 2026 Expansion
Section 4960 imposes a 21% excise tax when a tax-exempt organization pays a covered employee more than $1 million. The 2025 OBBBA expansion redefines "covered employee" as anyone employed since 2017, widening the tax base for hospitals, universities, and foundations filing Form 4720 in 2026.
Section 83(i) Tax Deferral on Private Company Stock: A Five-Year Lifeline for Pre-IPO Employees with RSUs and NSOs
Section 83(i) lets qualified employees of qualified private companies defer federal income tax on RSU settlements and NSO exercises for up to five years. The 80 percent grant rule, mandatory escrow, and 30-day election deadline explain why adoption stays in the single digits — and when the election still pays off.
Corporate Alternative Minimum Tax (CAMT): How the 15% Book-Income Levy on $1B+ Companies Actually Works
The Corporate Alternative Minimum Tax imposes a 15% levy on Adjusted Financial Statement Income for corporations averaging over $1 billion in AFSI. A practical guide to who qualifies, how AFSI is computed under section 56A, the FPMG $100M U.S. test, Form 4626 mechanics, and the interim simplified safe harbor.
FDII to FDDEI: How C Corporations Cut Federal Tax to 14% on Form 8993 in 2026
Under OBBBA, Section 250 renames FDII to FDDEI, sets the deduction at 33.34%, eliminates the QBAI offset, and removes interest and R&E allocation — producing an effective 14% federal rate on qualifying foreign-derived income for U.S. C corporations filing Form 8993 in 2026.
FDII and Form 8993: How U.S. C Corporations Hit a 13.125% Effective Tax Rate on Foreign Sales
A working guide to the FDII (now FDDEI) deduction on Form 8993 — which U.S. C corporations qualify, how the Section 250 math drops the effective federal rate to 13.125% on foreign-derived income, the taxable income limitation, documentation the IRS expects, and how OBBBA simplifies the calculation starting in 2026 by removing the QBAI step and expense allocations.
Form 1041 Explained: Compressed Brackets, DNI, and the K-1 Conduit That Decide Trust Tax Bills
A 2026 fiduciary's guide to Form 1041 — why trust brackets hit 37% at $15,200, how distributable net income routes taxable income to beneficiaries through Schedule K-1, and how the 65-day election cuts the tax bill after year-end.
Form 8283 Noncash Charitable Contributions: A Donor's Guide to the $5,000 Qualified Appraisal Threshold and IRS Substantiation Rules
Form 8283 is required when total noncash charitable contributions exceed $500. Above $5,000, donors need a USPAP-compliant qualified appraisal and three signatures on Section B; over $500,000 the full appraisal attaches to the return. Section 170(o) can claw the deduction back if the charity disposes of tangible property within three years, and the 40% gross valuation misstatement penalty has no reasonable-cause defense.
Form 8886 Reportable Transactions: The 75 Percent Penalty Hiding in Your Tax Return
Form 8886 discloses reportable transactions to the IRS. Missing it triggers a Section 6707A penalty up to $200,000 per year for entities and keeps the assessment statute open indefinitely on listed transactions under Section 6501(c)(10). This guide breaks down the five categories, the penalty math, filing mechanics, and the foreign currency loss trap that catches accidental filers.
Form 8886: The Reportable Transactions Disclosure That Triggers 75% Penalties and Six-Year IRS Lookbacks
Form 8886 carries a 75% penalty for undisclosed listed transactions, capped at $200,000 for entities, with no reasonable cause defense and a statute that stays open until one year after you file. Here's who must file, what counts as reportable, and how to handle late disclosure.
Generation-Skipping Transfer Tax in 2026: How Grandparents Pass Wealth to Grandchildren Without Paying Estate Tax Twice
A 2026 guide to the U.S. generation-skipping transfer (GST) tax — the permanent $15 million lifetime exemption under the One Big Beautiful Bill, who counts as a skip person, the three triggering events, dynasty trust mechanics, and the Forms 709, 706, and 706-GS that grandparent-to-grandchild transfers require.
Generation-Skipping Transfer Tax in 2026: How Grandparents Move Wealth to Grandchildren Without Paying Estate Tax Twice
For 2026 the One Big Beautiful Bill Act sets the GST exemption at $15 million per person ($30 million per couple), with a flat 40 percent rate on transfers to skip persons; this guide covers skip-person rules, direct skips, taxable terminations, automatic versus elective exemption allocation, and how dynasty trusts achieve a zero inclusion ratio.
The IC-DISC: How Closely Held Exporters Cut Federal Tax on Export Profits to 23.8%
The IC-DISC is the only permanent federal tax incentive dedicated to U.S. exporters that is available to pass-through entities. It routes export commissions through a tax-exempt paper corporation and back out as qualified dividends, cutting the effective federal rate on export profits from roughly 40% to 23.8% for closely held manufacturers, distributors, software vendors, and engineering firms.