Earlier this week, the IRS issued long-awaited proposed regulations under Section 162(m) of the Internal Revenue Code. Our colleagues at Covington’s Tax Reporting & Withholding Blog published a comprehensive summary and analysis of the proposed regulations. As you will see, the proposed regulations fell short of proposing workable solutions for public companies wrestling with the
deduction
Significant Reductions to Deductible Pay at Public Companies
Part of Our Series on the Tax Cuts and Jobs Act of 2017
Employers generally may deduct reasonable salaries and other compensation paid to their employees. However, section 162(m) of the Internal Revenue Code imposes a $1 million annual limit on the amount of compensation that a publicly held corporation can deduct with respect to each of its “covered employees.”
The Tax Cuts and Jobs Act of 2017 substantially revises section 162(m) in ways that will significantly limit the amount of compensation that many public companies will be able to deduct.Continue Reading Significant Reductions to Deductible Pay at Public Companies
Hidden Opportunity: Deducting 2018 Pension Contributions Against 2017 Income
Part of Our Series on the Tax Cuts and Jobs Act of 2017
At the end of 2017, many businesses scrambled to find expenses before year-end that could be deducted on their 2017 federal income tax return against the higher income tax rates in effect for last year. For most expenses, the deadline to act…