The Tax Cuts and Jobs Act (TCJA) has enhanced two depreciation-related breaks. These are favorite year-end tax planning tools for businesses. To take advantage of these breaks, you must purchase qualifying assets and place them in service by the end of the tax year. That means there’s still time to reduce your 2018 tax liability with these breaks, but you need to act soon. Section 179 expensing Sec. 179 expensing is valuable … Read more
A tried-and-true year-end tax strategy is to make charitable donations. As long as you itemize and your gift qualifies, you can claim a charitable deduction. But did you know that you can enjoy an additional tax benefit if you donate appreciated stock instead of cash? 2 benefits from 1 gift Appreciated publicly traded stock you’ve held more than one year is long-term capital gains property. If you donate it to … Read more
For investors, fall is an excellent time to review year-to-date gains and losses. Tax planning not only can it help you assess your financial health, but it also can help you determine whether to buy or sell investments before year-end to save taxes. This year, you also need to keep in mind the impact of the Tax Cuts and Jobs Act (TCJA). While the TCJA didn’t change long-term capital gains rates, … Read more
To avoid interest and penalties, you must make sufficient federal income tax payments long before your April filing deadline through withholding, estimated tax payments, or a combination of the two. The third 2018 estimated tax payment deadline for individuals is September 17. If you don’t have an employer withholding tax from your pay, you likely need to make estimated tax payments. But even if you do have withholding, you might … Read more
If you gamble, these tips can help you save money or at least give you a better projection on your next tax bill. Win or lose your income tax bill will be affected. Revisions under the Tax Cuts and Jobs Act (TCJA) could also have an impact. See our tips below: 1. Report your wins You must report 100% of your gambling winnings as taxable income. This includes the value of complimentary … Read more
Converting a traditional IRA to a Roth IRA can provide tax-free growth and tax-free withdrawals in retirement. But what if you convert your traditional IRA and then discover you would have been better off if you hadn’t converted it? Before the Tax Cuts and Jobs Act (TCJA), you could undo a Roth IRA conversion using a “recharacterization.” Effective with 2018 conversions, the TCJA prohibits recharacterizations — permanently. But if you executed a conversion … Read more
Now is a good time to familiarize yourself with the changes to the individual alternative minimum tax (AMT). Assessing your AMT risk now can help you plan what steps you can take during the last several months of the year to avoid the AMT, or at least minimize any negative impact. AMT vs. regular tax The top AMT rate is 28%, compared to the top regular ordinary-income tax rate of … Read more
Once upon a time, some parents and grandparents would attempt to save tax. This was by putting investments in the names of their young children or grandchildren in lower income tax brackets. To discourage such strategies, Congress created the “kiddie” tax back in 1986. Since then, this tax has gradually become more far-reaching. Now, under the Tax Cuts and Jobs Act (TCJA), the kiddie tax has become more dangerous than ever. … Read more
The Tax Cuts and Jobs Act (TCJA) provides a valuable new tax break to noncorporate owners of pass-through entities: a deduction for a portion of qualified business income (QBI). The deduction generally applies to income from sole proprietorships, partnerships, S corporations and, typically, limited liability companies (LLCs). It can equal as much as 20% of QBI. But once taxable income exceeds $315,000 for married couples filing jointly or $157,500 for … Read more
