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.
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...
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.
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.
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.
Under pre-Act law, corporations that receive dividends from other corporations are entitled to a deduction for dividends received. If the corporation owns at least 20% of the stock of another corporation, an 80% dividends received deduction is allowed. Otherwise, a 70% deduction is allowed.New law.
Under pre-Act law, the corporate alternative minimum tax (AMT) is 20%, with an exemption amount of up to $40,000. Corporations with average gross receipts of less than $7.5 million for the preceding three tax years are exempt from the AMT. The exemption amount phases out starting at $150,000 of alternative minimum taxable income.New law.
Starting in 2018, qualified educational expenses for 529 plans will include up to $10,000 a year in tuition and expenses for primary and secondary school expenses (public, private, or religious). Previously, you could only use it towards qualified college expenses. There were also some related changes to ABLE accounts for individuals with special needs.Put simply, you can now pay for up to $10k a year of private K-12 school through a 529 plan.
Saving for college in a 529 plan has many benefits; ranging from the power of compound interest, a wide variety of investment options, tax-free earnings, and tax-free withdrawals. For Ohioans saving with Ohio’s 529 Plan, there’s also a deduction from their state taxable income for contributions made to CollegeAdvantage. Since 2000, the yearly deduction has been set at a maximum of $2,000 per account but the New Year brings a big change to this Ohio tax deduction.Beginning on Jan.
One of the most powerful college savings vehicles is the 529 college savings plan. Your money grows tax-free in those programs as long as you follow all of the relevant tax laws, and they allow you to make significant contributions. There is no maximum annual 529 contribution limit, but there are other factors to keep in mind as you decide how much to save in a 529.The IRS does not set limits on how much you can contribute to a 529 plan.
