Tax Reform and Accelerating Deductions: Payroll Tax Accruals and Permanent Tax Savings

Payroll Tax Liability and Deductions, and Impact on Current and Deferred Compensation

Recording of a 90-minute CLE/CPE webinar with Q&A


Conducted on Thursday, January 25, 2018

Recorded event now available

or call 1-800-926-7926
Program Materials

This CLE/CPE webinar will offer tax counsel insight and guidance on significant tax advantages in the impending tax reform, which will include corporate income tax reductions related to the deduction of payroll tax expense. The panel will discuss the effects of changes in the corporate income tax rate and leveraging payroll tax deductions to reduce tax liability and establish permanent tax savings for employers without negative impact to employees.

Description

Proposed tax reform gives tax counsel and advisers an opportunity to develop significant tax-saving strategies for business clients specifically and uniquely related to payroll tax deductions and deferred compensation. Knowledge of the IRS safe harbor requirements and tactics available to accrual-method employers opens the door to accelerating payroll tax deductions on year-end wages accrued in one year but paid in the next year.

The IRS allows a payroll tax deduction of year-end wages if the accrual-method taxpayer satisfies specific exceptions to the economic performance rules. Satisfying this requirement hinges on establishing payroll tax liability with an amount determined by year end.

This can be difficult to discern for any given employee, leading to the development of specific guidelines allowing accrual-method employers to obtain automatic IRS consent to change under the safe harbor method of accounting for accrued payroll tax liabilities.

Listen as our panel navigates through the requirements of Regs. Sec. 1.461-5, Section 19.04(1)(a)(i)(A) of Rev. Proc. 2017-30, Rev. Proc. 2008-25 and other relevant provisions associated with payroll tax liability, deduction, treatment, capitalization, and their effect on current and deferred compensation.

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Outline

  1. Payroll tax deduction, treatment and capitalization (Section 162, Section 469 and Section 263A)
  2. Deductibility of year end wages and the recurring item exception (Rev. Rul. 96-51 and Regs. Sec. 1.461-5)
  3. Deferred compensation and payroll tax liability (Section 19.04(1)(a)(i)(A) of Rev. Proc. 2017-30)
  4. IRS safe harbor and procedure

Benefits

The panel will review these and other key issues:

  • Identifying the methods and processes of payroll tax deductions and potential tax liability
  • Recognizing the deductibility of year end wages and IRS exceptions
  • Understanding the payroll tax implications of failing to properly plan and account for deferred compensation
  • Discerning the deduction deferral rules provided under Section 267 as such relates to employee benefit plans

Faculty

Delgado, Robert
Robert Delgado
Principal
KPMG

Mr. Delgado consults on the taxation of compensation and benefits, including executive compensation, equity plans,...  |  Read More

Stecher, Terri
Terri Stecher
Director
KPMG

Other Formats
— Anytime, Anywhere

Strafford will process CLE credit for one person on each recording. All formats include program handouts. To find out which recorded format will provide the best CLE option, select your state:

CLE On-Demand Video

$297

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$297