Weekly Tax Brief

Why you shouldn’t wait to file your 2018 income tax return

Details: Published: 18 February 2019 18 February 2019

The IRS opened the 2018 income tax return filing season on Jan. 28. Consider filing as soon as you can, even if you typically don’t file this early. It can help protect you from tax identity theft, in which a thief files a return using your Social Security number to claim a bogus refund. If you file first, it will be returns filed by any would-be thieves that are rejected by the IRS, not yours. Other benefits: You’ll get your refund sooner or, if you owe tax, you’ll know how much you owe sooner so you can be ready to pay it by April 15. Contact us with questions.

Higher mileage rate may mean larger tax deductions for business miles in 2019

Details: Published: 08 February 2019 08 February 2019

A higher IRS mileage rate means larger tax deductions for business miles in 2019. The optional standard mileage rate used to calculate the deductible costs of operating an auto for business has increased by 3.5 cents, to 58 cents per mile. The mileage rate comes into play when businesses don’t want to keep track of actual vehicle-related expenses. But you still must record certain information, such as the mileage, date and destination for each trip. The mileage rate can also be used for reimbursing employees. Many rules and limits apply. Contact us for details.

2 major tax law changes for individuals in 2019

Details: Published: 28 January 2019 28 January 2019

Most TCJA provisions went into effect in 2018 and apply through 2025 or are permanent, but two major changes affect individuals beginning in 2019: 1) While the TCJA reduced the medical expense deduction threshold from 10% of adjusted gross income to 7.5%, the reduction applies only to 2017 and 2018. So for 2019, the threshold returns to 10%. 2) For divorce agreements executed (or, in some cases, modified) after Dec. 31, 2018, alimony payments won’t be deductible by the payer but will be excluded from the recipient’s taxable income. Contact us for details.

Business owners: An exit strategy should be part of your tax planning

Details: Published: 25 January 2019 25 January 2019

If you own a business, an exit strategy should be part of your tax planning so that taxes don’t trip you up when you retire or leave the business for some other reason. An exit strategy is a plan for passing on responsibility for running the company, transferring ownership and extracting your money from the business. Common exit options include a buy-sell agreement, succession within the family, a management buyout, an ESOP and a sale to an outsider. Each involves a variety of tax and nontax considerations. Contact us to discuss your exit strategy.

A review of significant TCJA provisions impacting individual taxpayers

Details: Published: 21 January 2019 21 January 2019

Now that 2019 has begun, there isn’t too much you can do to reduce your 2018 income taxes. But it’s smart to begin preparing for filing your 2018 return. Because the TCJA, signed into law at the end of 2017, likely will have a major impact on your 2018 taxes, it’s a good time to review the most significant provisions affecting individual taxpayers. For example, it generally reduces tax rates. And it nearly doubles the standard deduction and expands the child tax credit. But it also reduces or eliminates many breaks. Contact us to review the changes affecting you.

6 last-minute tax moves for your business

Details: Published: 16 January 2019 16 January 2019

Tax planning is a year-round activity, but there are still some year-end strategies you can use to lower your 2018 tax bill. Here are six last-minute tax moves business owners should consider: 1) Postpone invoices. 2) Prepay expenses. 3) Buy equipment. 4) Use credit cards. 5) Contribute to retirement plans. 6) Qualify for the new “pass-through” deduction. These strategies are subject to various limitations and restrictions, so consult us before you implement them. We can also offer more ideas for reducing your taxes this year and next.

You may be able to save more for retirement in 2019

Details: Published: 11 January 2019 11 January 2019

Retirement plan contribution limits are indexed for inflation, and most have increased for 2019. So you may have opportunities to increase your retirement savings. Limits for 401(k)s, SIMPLEs and IRAs increase by $500, to $19,000, $13,000 and $6,000, respectively. Catch-up contributions (for taxpayers age 50 or older) remain unchanged, however. They’re $6,000, $3,000 and $1,000, respectively. Additional factors may affect how much you’re allowed to contribute. For more on how to make the most of tax-advantaged retirement-saving opportunities in 2019, contact us.

2019 Q1 tax calendar: Key deadlines for businesses and other employers

Details: Published: 07 January 2019 07 January 2019

Here are a few key tax-related deadlines for businesses during Q1 of 2019. JAN. 31: File 2018 Forms W-2 with the Social Security Administration and provide copies to employees. Also provide copies of 2018 Forms 1099-MISC to recipients and, if reporting nonemployee compensation in Box 7, file, too. FEB. 28: File 2018 Forms 1099-MISC if not required earlier and paper filing. MAR. 15: If a calendar-year partnership or S corp., file or extend your 2018 tax return. Contact us to learn more about filing requirements and ensure you’re meeting all applicable deadlines.

Could “bunching” medical expenses into 2018 save you tax?

Details: Published: 20 December 2018 20 December 2018

Some of your medical expenses may be tax deductible, but only if you itemize deductions and have enough expenses to exceed the applicable floor for deductibility. With proper planning, you may be able to time controllable medical expenses to your tax advantage. The Tax Cuts and Jobs Act (TCJA) could make bunching such expenses into 2018 beneficial for some taxpayers. At the same time, certain taxpayers who’ve benefited from the deduction in previous years might no longer benefit because of the TCJA’s increase to the standard deduction. Contact us to learn more.

Tax reform expands availability of cash accounting

Details: Published: 18 December 2018 18 December 2018

The cash method of accounting offers greater tax-planning flexibility, allowing some businesses to defer taxable income. Under the TCJA, if your business’s average gross receipts for the previous three tax years are $25 million or less, you generally will now be eligible for the cash method for federal tax purposes, regardless of how your business is structured, your industry or whether you have inventories. Newly eligible businesses should determine whether the cash method would be advantageous and, if so, consider switching methods. Contact us to learn more.

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