On October 4 2023, Massachusetts Governor Maura Healy signed H. 4104 which enacted significant tax reform legislation for both businesses and individuals.  Some of the more notable changes are outlined below:   Effective for Tax year 2023 The income tax rate for short-term capital gains (e.g. gains from the sale of capital assets held for 1 year or less) is reduced from 12% to 8.5. This is...

This past month, the IRS published Notice 2023-54 which provides transition relief for plan administrators, payors, plan participants, IRA owners, and beneficiaries in connection with the change in the required beginning date for required minimum distributions.  The required beginning date for RMDs was changed under Sec. 401(a)(9), pursuant to Section 107 of the SECURE 2.0 Act, enacted on Dec....

Prior to 2022, Massachusetts personal income tax was based on fixed date conformity, meaning it started with federal gross income as defined by the Internal Revenue code as of 1/1/2005.  This differed from Massachusetts corporate tax which had rolling conformity, meaning the starting point was the Internal Revenue Code as currently in effect.  As part of the FY23 Budget, Massachusetts updated...

A constitutional amendment to add a 4% surtax for Massachusetts taxpayers with over $1,000,000 of taxable income was passed with a 52% vote this past Tuesday and is expected to go into effect for the 2023 tax year. The current 5% tax rate will still apply to the first $1,000,000 of ordinary income and long-term capital gains, and the 12% tax rate on short term capital gains remains untouched,...

Key Tax Provisions of the Inflation Reduction Act

Beginning in 2022, amendments made by the Tax Cuts and Jobs Act require taxpayers to amortize research and experimentation expenditures over five years or 15 years, for research and development performed outside the U.S.  Attempts were made to delay the adoption of these changes to 2026 with the Build Back Better Bill, but since the BBB stalled in congress, taxpayers should prepare their...

Employee vs Independent Contractor Misclassification Companies sometimes look to hire independent contractors instead of employees for a number of different reasons.  A company may choose to classify a worker as an independent contractor for legitimate business reasons but may also do so to avoid any number of the following: Avoid paying/offering required & voluntary benefits such as health...