By Luke Burke

It’s that time of year again. This is the month of spreadsheets, budgets, new hires, and projections. It can be difficult to budget and project with confidence though, when new rules and regulations go into effect. 

As Jerry Seinfeld once joked, “To me a lawyer is basically the person who knows the rules of the country. We’re all throwing the dice, playing the game, moving our pieces around the board, but if there’s a problem, the lawyer is the only person who has read the inside of the top of the box.” 

I’m not here to tell you I know all the rules, and my most sage advice is that you should always seek legal and tax advice specific to your business and situation. I will admit, however, to having read the top of the box (at least once). So, with that caveat noted, here are some of the new rules in the 2019 version of our game. 

In December 2017, Congress passed the first major overhaul of the federal tax code since 1986. Although many of the provisions went into effect in 2018, the IRS regulations and guidance to taxpayers have been drafted in an ongoing process throughout the past year. As such, we will discover the actual effect of many of the tax code revisions in 2019. 

Further, cases challenging interpretation of the tax code are numerous. In the 31 years since the last tax overhaul, courts have interpreted the tax code. These interpretations may need to be revisited in light of the new law, and new interpretation issues will arise. Numerous cases will be filed in late 2019, and it is unlikely that we will fully understand the new law for several years. 

The new tax law is also likely to have a major effect on nonprofit organizations that rely on charitable donations. The law essentially doubles the annual standard deduction for individuals to $12,000 and for married couples filing jointly to $24,000. This deduction significantly decreases the number of taxpayers who will itemize their deductions. 

According to the Fundraising Effectiveness Project (afpfep.org), the amount of giving and number of donors decreased in the first half of 2018 compared to the first half of 2017. Further, most individuals have not seen the effect of the new tax code on their tax return, and it is likely that the effect on giving will increase in the second quarter of 2019. As such, it is expected that nonprofit organizations will need to seek donations from businesses and higher-income taxpayers. 

If your business is looking to hire, the applicant pool has expanded. Many employers have written or unwritten rules against hiring individuals who have been convicted of a crime regardless of the crime or how long ago it occurred. In July 2018, to combat this stigma, the General Assembly passed a new law allowing many more individuals to become eligible for expungement of their minor nonviolent criminal offenses. The expansion of eligible nonviolent offenses includes minor drug offenses, multiple offenses that occurred at the same time, and offenses by youthful offenders. 

The law grants employers immunity against lawsuits related to the worker’s expunged offense, but also directs that “employers shall not use expunged information adversely against an employee.” As such, it is likely a best practice to avoid asking employees about expunged offenses to avoid any issues regarding use of this information.