Weekly Tax Brief

The tax impact of the TCJA on estate planning

Details: Published: 28 June 2018 28 June 2018

The massive changes the TCJA made to income taxes have garnered the most attention. But the new law also made major changes to gift and estate taxes. While the TCJA didn’t repeal these taxes, it did significantly reduce the number of taxpayers who’ll be subject to them by more than doubling the gift and estate tax exemption. Yet factoring taxes into your estate planning is still important. First, the higher exemptions are only temporary. Second, you still may face state estate tax. Third, tax-smart estate planning can reduce income tax. Questions? Contact us.

Factor in state and local taxes when deciding where to live in retirement

Details: Published: 21 June 2018 21 June 2018

Thinking about retiring to another state? Consider state and local taxes. A state that has no personal income tax may appear to be the best option. But if you don’t also factor in property, sales and estate taxes, you could be hit with unpleasant tax surprises. Also look at what types of income a state taxes. Some don’t tax wages but do tax interest and dividends. Others offer tax breaks for retirement plan and Social Security income. And keep in mind the TCJA’s new $10,000 limit on the federal deduction for state and local taxes. Contact us to learn more.

What businesses need to know about the tax treatment of bitcoin and other virtual currencies

Details: Published: 14 June 2018 14 June 2018

Most small businesses aren’t yet accepting bitcoin or other virtual currency payments, but more and more larger businesses are. And the trend may trickle down to smaller businesses. What are the tax consequences? The IRS has yet to offer much guidance, but it has established that bitcoin should be treated as property, not currency, for federal income tax purposes. So businesses accepting bitcoin payments must report gross income based on the fair market value of the virtual currency when received, measured in equivalent U.S. dollars. Contact us to learn more.

Can you deduct business travel when it’s combined with a vacation?

Details: Published: 07 June 2018 07 June 2018

This summer are you going on a business trip in the U.S. and tacking on some vacation days? Are you a business owner or self-employed? You may be able to deduct some of your expenses. Transportation costs to and from the business activity location may be 100% deductible if the primary reason for the trip is business. Out-of-pocket expenses for business days are generally fully deductible. Examples include lodging, meals (subject to the 50% disallowance rule), seminar and convention fees, and cab fare. Additional rules and limits apply. Contact us with questions.

Do you need to adjust your withholding?

Details: Published: 31 May 2018 31 May 2018

If you received a large refund after filing your 2017 income tax return, you’re probably enjoying the influx of cash. But it also means you essentially made the government an interest-free loan. This would usually indicate that you should consider reducing your withholding. But 2018 is a little different: To reflect TCJA changes, the IRS updated the withholding tables, generally reducing the amount withheld. The new tables might cause some taxpayers to not have enough withheld. Contact us for help determining whether you should adjust your 2018 withholding.

Get started on 2018 tax planning now!

Details: Published: 22 May 2018 22 May 2018

With the April 17 individual income tax filing deadline behind you (or with your 2017 tax return on the back burner if you filed for an extension), you may be hoping to not think about taxes for the next several months. But for maximum tax savings, now is the time to start tax planning for 2018. It’s especially critical to get an early start this year because the Tax Cuts and Jobs Act has substantially changed the tax environment. We can help you determine how the new law affects you and what strategies you should implement to minimize your tax liability.

Families with college students may save tax on their 2017 returns with one of these breaks

Details: Published: 15 May 2018 15 May 2018

The recently passed Bipartisan Budget Act of 2018 included an extension of the tuition and fees deduction. This is one of a few higher education tax breaks families with college or grad students may be able to claim on their 2017 returns. There’s also the American Opportunity credit and the Lifetime Learning credit. In most cases you can take only one break per student, and, for some breaks, only one per tax return. Other rules and limits also apply. To learn which break(s) will provide you the greatest savings on your 2017 tax return, contact us.

TCJA temporarily lowers medical expense deduction threshold

Details: Published: 08 May 2018 08 May 2018

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.

State and local sales tax deduction remains, but subject to a new limit

Details: Published: 30 January 2018 30 January 2018

Individual taxpayers who itemize their deductions can deduct either state and local income taxes or state and local sales taxes. The ability to deduct state and local taxes — including income or sales taxes, as well as property taxes — had been on the tax reform chopping block, but it ultimately survived. However, for 2018 through 2025, the Tax Cuts and Jobs Act imposes a new limit on the state and local tax deduction. Will you benefit from the sales tax deduction on your 2017 or 2018 tax return?

Can you deduct home office expenses?

Details: Published: 23 January 2018 23 January 2018

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.

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