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2018 Year-end Tax Planning Tips

As the end of another year approaches, it’s time to start thinking about ideas which may help lower your tax bill. When discussing ideas and tips with your tax advisor, it’s wise to remember a few things:This year’s tax planning might be less exact than in past years, as everyone is still working on understanding the intricacies of the tax law enacted in December 2017;Year-end tax planning can go beyond just reducing this year’s tax bill, it can include looking into future years as well;Planning...

November 2, 2018 12:00 pm

Planning for Business Owners

Flow-through planning. The activities, income, and deductions of partnerships, S corporations, and sole proprietorships flow through to their owners and impact the owners’ individual tax returns. In addition to planning related to incurring expenses or deferring income, the new tax law creates a new deduction for certain qualified business income (“QBI”) from a pass-through business.

November 2, 2018 12:00 pm

Gift and Estate Tax Planning

Consider implementing gift and estate planning strategies to transfer wealth to younger generations while minimizing transfer taxes.Annual exclusion gifts. The tried and true strategy of making maximum annual exclusion gifts still constitutes good planning. For 2018, a donor can give $15,000 per donee, or $30,000 per donee from a married couple.

November 2, 2018 12:00 pm

Economic Nexus & State Sales Tax

On June 21, 2018, the Supreme Court of the United States handed down a historic decision in the sales and use tax nexus case South Dakota v. Wayfair, Inc. The 5-4 ruling overturns physical presence standards upheld in previous cases, such as Quill Corp.

November 2, 2018 12:00 pm

Filing College Financial Aid Forms (FAFSA)

For the 2019-2020 school year, the federal government's financial aid form, the FAFSA, can be filed as early as October 1, 2018. It relies on current asset information and two-year-old income information from your 2017 tax return, which means you'll have the income data you need when you sit down to complete the form. This is a relatively new process.

November 2, 2018 12:00 pm

Student Loan Discharged on Death or Disability

Gross income generally includes the discharge of indebtedness of the taxpayer. Under an exception to this general rule, gross income does not include any amount from the forgiveness (in whole or in part) of certain student loans, if the forgiveness is contingent on the student's working for a certain period of time in certain professions for any of a broad class of employers.New law. For discharges of indebtedness after Dec.

January 26, 2018 12:00 pm

State and Local Tax Deduction Limited

Under pre-Act law, taxpayers could deduct from their taxable income as an itemized deduction several types of taxes paid at the state and local level, including real and personal property taxes, income taxes, and/or sales taxes.New law. For tax years beginning after Dec. 31, 2017 and before Jan.

January 26, 2018 12:00 pm

Standard Deduction Increased

Taxpayers are allowed to reduce their adjusted gross income (AGI) by the standard deduction or the sum of itemized deductions to determine their taxable income. Under pre-Act law, for 2018, the standard deduction amounts, indexed to inflation, were to be: $6,500 for single individuals and married individuals filing separately; $9,550 for heads of household, and $13,000 for married individuals filing jointly (including surviving spouses). Additional standard deductions may be claimed by taxpayers...

January 26, 2018 12:00 pm

Repeal of Obamacare Individual Mandate

Under pre-Act law, the Affordable Care Act (also called the ACA or Obamacare) required that individuals who were not covered by a health plan that provided at least minimum essential coverage were required to pay a “shared responsibility payment” (also referred to as a penalty) with their federal tax return. Unless an exception applied, the tax was imposed for any month that an individual did not have minimum essential coverage.New law. For months beginning after Dec.

January 26, 2018 12:00 pm

Personal Exemptions Suspended

Under pre-Act law, taxpayers determined their taxable income by subtracting from their adjusted gross income any personal exemption deductions. Personal exemptions generally were allowed for the taxpayer, the taxpayer's spouse, and any dependents. The amount deductible for each personal exemption was scheduled to be $4,150 for 2018, subject to a phaseout for higher earners.New law.

January 26, 2018 12:00 pm