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 [...]

Don’t be a victim of tax identity theft – File your 2017 return early

| Tax Briefs

The IRS has just announced that it will begin accepting 2017 income tax returns on January 29. You may be more concerned about the April 17 filing deadline or even the extended deadline of October 15 (if you file for an extension by April 17). After all, why go through the hassle of filing your return earlier than you have to?   But it can be a good idea to file as close to January 29 as possible. Doing so helps protect you from tax identity theft.   All-too-common scam   Here’s why early Read more [...]

The TCJA temporarily expands bonus depreciation

| Tax Briefs

The Tax Cuts and Jobs Act (TCJA) enhances some tax breaks for businesses while reducing or eliminating others. One break it enhances — temporarily — is bonus depreciation. While most TCJA provisions go into effect for the 2018 tax year, you might be able to benefit from the bonus depreciation enhancements when you file your 2017 tax return.   Pre-TCJA bonus depreciation   Under pre-TCJA law, for qualified new assets that your business placed in service in 2017, you can claim a 50% first-year Read more [...]

The New treatment of alimony under the 2017 Tax Reform Law

| 2017 Tax Reform Updates, Tax Briefs

The Tax Cuts and Jobs Act (the Act) has made changes to the tax treatment of alimony.  These changes take effect for divorce agreements and legal separation agreements executed after 2018. Current rules Under the current rules, an individual who pays alimony or separate maintenance may deduct an amount equal to the alimony or separate maintenance payments paid during the year as an "above-the-line" deduction. (An "above-the-line" deduction, i.e., a deduction that a taxpayer need not itemize Read more [...]

Tax Cuts and Jobs Act: Key provisions affecting businesses

| 2017 Tax Reform Updates, Business Miscellaneous, Tax Briefs

On December 20, Congress completed passage of the largest federal tax reform law in more than 30 years. Commonly called the “Tax Cuts and Jobs Act” (TCJA), the new law means substantial changes for business taxpayers. The following is a brief overview of some of the most significant provisions. C-Corporate Tax Rates Reduced - For tax years beginning after Dec. 31, 2017, the corporate tax rate is a flat 21% rate. Dividends-Received Deduction Percentages Reduced - For tax years beginning Read more [...]

Tax Cuts and Jobs Act Changes the Home Mortgage and Equity Loan Interest Deduction

| 2017 Tax Reform Updates, Tax Briefs

The rules for how taxpayers deduct home mortgage and home equity lines of credit interest have changed under the new tax Act starting in 2018. The pre-Act rules for mortgage interest deductions allowed married filing joint taxpayers to deduct interest on mortgage debt up to $1 million used for a primary residence and a second home. The limit was $500,000 for a married filing separate taxpayer. Married filing joint taxpayers were also able to deduct qualifying home equity debt limited to the lesser Read more [...]

2017 Tax Reform Last Minute Strategies

| 2017 Tax Reform Updates, Business Briefs, Tax Briefs

Congress has enacted the biggest tax reform law in thirty years, one that will make fundamental changes in the way you, your family and your business calculate your federal income tax bill, and the amount of federal tax you will pay. Since most of the changes will go into effect next year, there's still a narrow window of time before year-end to soften or avoid the impact of crackdowns and to best position yourself for the tax breaks that may be heading your way. Here's a quick rundown of last-minute Read more [...]