You still have time to make 2017 IRA contributions

| Tax Briefs

Tax-advantaged retirement plans like IRAs allow your money to grow tax-deferred — or, in the case of Roth accounts, tax-free. The deadline for 2017 contributions is April 17, 2018. Deductible contributions will lower your 2017 tax bill, but even nondeductible contributions can be beneficial. Don’t lose the opportunity The 2017 limit for total contributions to all IRAs generally is $5,500 ($6,500 if you were age 50 or older on December 31, 2017). But any unused limit can’t be carried forward Read more [...]

Home-related tax breaks are valuable on 2017 returns, will be less so for 2018

| Tax Briefs

Home ownership is a key element of the American dream for many, and the U.S. tax code includes many tax breaks that help support this dream. If you own a home, you may be eligible for several valuable breaks when you file your 2017 return. But under the Tax Cuts and Jobs Act, your home-related breaks may not be as valuable when you file your 2018 return next year. 2017 vs. 2018 Here’s a look at various home-related tax breaks for 2017 vs. 2018: Property tax deduction. For 2017, property Read more [...]

Casualty losses can provide a 2017 deduction, but rules tighten for 2018

| Tax Briefs

If you suffered damage to your home or personal property last year, you may be able to deduct these “casualty” losses on your 2017 federal income tax return. For 2018 through 2025, however, the Tax Cuts and Jobs Act suspends this deduction except for losses due to an event officially declared a disaster by the President. What is a casualty? It’s a sudden, unexpected or unusual event, such as a natural disaster (hurricane, tornado, flood, earthquake, etc.), fire, accident, theft or vandalism. Read more [...]

Sec. 179 expensing provides small businesses tax savings on 2017 returns — and more savings in the future

| Tax Briefs

If you purchased qualifying property by December 31, 2017, you may be able to take advantage of Section 179 expensing on your 2017 tax return. You’ll also want to keep this tax break in mind in your property purchase planning, because the Tax Cuts and Jobs Act (TCJA), signed into law this past December, significantly enhances it beginning in 2018 2017 Sec. 179 benefits Sec. 179 expensing allows eligible taxpayers to deduct the entire cost of qualifying new or used depreciable property and Read more [...]

Tax deduction for moving costs: 2017 vs. 2018

| Tax Briefs

If you moved for work-related reasons in 2017, you might be able to deduct some of the costs on your 2017 return — even if you don’t itemize deductions. (Or, if your employer reimbursed you for moving expenses, that reimbursement might be excludable from your income.) The bad news is that, if you move in 2018, the costs likely won’t be deductible, and any employer reimbursements will probably be included in your taxable income. Suspension for 2018–2025 The Tax Cuts and Jobs Act (TCJA), Read more [...]

TCJA temporarily lowers medical expense deduction threshold

| Tax Briefs

With rising health care costs, claiming whatever tax breaks related to health care that you can is more important than ever. But there’s a threshold for deducting medical expenses that may be hard to meet. Fortunately, the Tax Cuts and Jobs Act (TCJA) has temporarily reduced the threshold.   What expenses are eligible?   Medical expenses may be deductible if they’re “qualified.” Qualified medical expenses involve the costs of diagnosis, cure, mitigation, treatment or prevention of disease, Read more [...]

Basics of the New 20 Percent Business Income Deduction

| Business Miscellaneous, Tax Briefs

By Dave Garrett, CPA, CGMA   If you operate your business as a sole proprietorship, partnership, or S corporation, your 2018 income from these businesses can qualify for some or all of the new 20 percent deduction. You also can qualify for the new 20 percent 2018 tax deduction on the income you receive from your real estate investments, publicly-traded partnerships, real estate investment trusts (REITs), and qualified cooperatives. To qualify for the 20 percent with almost no complications, Read more [...]

Can you deduct home office expenses?

| Tax Briefs

Working from home has become commonplace. But just because you have a home office space doesn’t mean you can deduct expenses associated with it. And for 2018, even fewer taxpayers will be eligible for a home office deduction. Changes under the TCJA For employees, home office expenses are a miscellaneous itemized deduction. For 2017, this means you’ll enjoy a tax benefit only if these expenses plus your other miscellaneous itemized expenses (such as unreimbursed work-related travel, certain Read more [...]

401(k) retirement plan contribution limit increases for 2018; most other limits are stagnant

| Tax Briefs

Retirement plan contribution limits are indexed for inflation, but with inflation remaining low, most of the limits remain unchanged for 2018. But one piece of good news for taxpayers who’re already maxing out their contributions is that the 401(k) limit has gone up by $500. The only other limit that has increased from the 2017 level is for contributions to defined contribution plans, which has gone up by $1,000. Type of limit 2018 limit Elective deferrals to 401(k), 403(b), Read more [...]