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Tag Archive for Deductions

Tax Reform Impact On Meals, Entertainment, And Automobile Parking

If you’ve formed certain habits related to how you handle meals, entertainment, transportation, and parking as it relates to your business and taxes, the time to change those habits has come.

As this report notes, tax reform law commonly referred to as H.R. 1 Tax Cuts and Jobs Act of 2017 has changed the deductibility of certain meals, entertainment and transportation expenses. Before 2018, a taxpayer could deduct 50 percent of business meals and entertainment and 100 percent of meals provided through an in-house cafeteria or meals provided for the convenience of the employer (i.e., also known as a de minimis fringe benefit).

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IRS Clarifies Interest On Home Equity Loans Can Still Be Deductible

In an Information Release, IRS has announced that in many cases, taxpayers can continue to deduct interest paid on home equity loans under the recently enacted Tax Cuts and Jobs Act.

Taxpayers may deduct interest on mortgage debt that is “acquisition debt.” Acquisition debt means debt that is: (1) secured by the taxpayer’s principal home and/or a second home, and (2) incurred in acquiring, constructing, or substantially improving the home. This rule hasn’t been changed by the Tax Cuts and Jobs Act.

Under pre-Tax Cuts and Jobs Act law, the maximum amount that was treated as acquisition debt for the purpose of deducting interest was $1 million ($500,000 for marrieds filing separately). Under the Tax Cuts and Jobs Act, for tax years beginning after Dec. 31, 2017, and before Jan. 1, 2026, the limit on acquisition debt is reduced to $750,000 ($375,000 for a married taxpayer filing separately).

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Preparing Taxes For 2018 And Beyond

Tax reform has changed the way most taxpayers need to think about and plan for their taxes. It is no longer business as usual, and those who think it is are in for a rude awakening come tax time next year.

For most taxpayers, the most significant change is the increase in their standard deduction, which on the surface seems like a big benefit. But don’t overlook the fact that the same tax reform that nearly doubled the standard deduction took away the personal exemption as a deduction. So, for example, under old law for 2018, a married couple’s standard deduction would have been $13,000, and their two personal exemptions would have been $8,300 (2 x $4,150), for a total deduction of $21,300. Under the new law, they will be able to deduct $24,000, the new standard deduction for 2018.

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How Does Negative Gearing Work For Australian Expatriates? Cash And Non-Cash Deductions

Shane Macfarlane, Tax Advisor, Tax Blog, Ho Chi Minh City, Viet Nam, TaxConnections

If you’ve paid attention to the news lately, you’ve no doubt heard the term “negative gearing”. It has become somewhat of a political football – with the Liberal and National parties supporting current arrangements, while Labour intends to change it. But what exactly is negative gearing and how do the rules apply to Australian expatriates?

Negative Gearing 101 Read more

Am I At Risk For Being Audited?

Frank Hider, Tax Advisor, Dallas, TX, TaxConnections

Even though some IRS audits are chosen at random, there are a few factors that could put Texas taxpayers at an increased risk.

Taxpayers in Texas may understandably have a fear of being audited. After all, an Internal Revenue Service audit may be incredibly time-consuming and end in the consumer having to pay money to the government. However, that is not always the case. Read more

New Law Includes A Mixed Bag Of Benefits And Limits To Tax Breaks For Businesses

Steven Schechter, Tax Advisor, Santa Clara, CA,TaxConnections

The Tax Cuts and Jobs Act (TCJA), which was signed into law on December 22, will broadly impact businesses of all sizes.

The bill significantly reduces the income tax rate for corporations and eliminates the corporate alternative minimum tax (AMT). It also provides a large new tax deduction for most owners of pass-through entities and significantly increases individual AMT and estate tax exemptions. And it makes major changes related to the taxation of foreign income.

You may even be able to utilize some enhancements on your 2017 tax return. Read more

What Does Tax Reform Mean For Me As An Individual?

John Adams, Tax Advisor, Cherry Hill, NJ, TaxConnections

Many of the politicians touted the new Tax Cuts and Jobs Act as the simplification of our tax code. While it is true that some people may now be able to file less complicated tax returns, the law contains so many provisions that it could effect each person’s tax return in a different way. Much of the “simplification” comes from the repeal of certain deductions which required detailed record keeping and calculations. Whether or not this will save people money is yet to be seen. Read more

How To Deduct Toll Expenses On Your Taxes

Monika Miles, Tax Advisor, San Jose, CA, TaxConnections

In this Ask a Tax Expert, our tax pro answers how to deduct tolls on your taxes. Remember, you can deduct nearly any toll as long as it’s related to business. But, what if your tolls are related to charity?

Can I Deduct Toll Expenses On Taxes?

Q. My wife volunteers for a hospice care organization. She travels there daily and pays a lot of tolls to get to some of her patients. Most of our monthly toll bill is for her volunteer work. Would we be able to deduct those from our taxes? Read more

2018 Pocket Tax Guide Online Edition

Bernell Ward, Tax Advisor, Bronx, NY, TaxConnections

It has been a busy time for tax-related news and upcoming changes. We have compiled many of the tax changes, deductions and tax rates for easy reference year round. It is more important than ever to plan ahead and review your options to maximize your financial results. Also please visit our side-by-side comparison of 2017 tax law and and the recently enacted “Tax Cuts and Jobs Act.”

HIGHLIGHTS OF THE CHANGES AFFECTING 2018

Congress in December of 2017 passed the Tax Cuts and Jobs Act that made sweeping changes to the tax laws. The issues impacting individuals and small businesses are included throughout this pocket tax guide. The following are changes not covered elsewhere in the guide.  Read more

Tax Time Has Arrived! Are You Ready?

Peter Flournoy, Tax Advisor, Norwalk, CT, TaxConnections

If you’re like most taxpayers, you find yourself with an ominous stack of “homework” around TAX TIME! Pulling together the records for your tax appointment is never easy, but the effort usually pays off in the extra tax you save! When you arrive at your appointment fully prepared, you’ll have more time to:

  • Consider every possible legal deduction;
  • Evaluate which income reporting and deductions are best suited to your situation;
  • Explore current law changes that affect your tax status;
  • Talk about tax-planning alternatives that could reduce your future tax liability.

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How To Maximize Deductions For Business Real Estate

William Rogers, Tax Advisor

Currently, a valuable income tax deduction related to real estate is for depreciation; however, the depreciation period for such property is long and land itself isn’t depreciable.

Whether your real estate property is occupied by your business or is being used as a rental, here’s how you can maximize your deductions:

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Reporting Business Mileage On Your Tax Return

MileIQ

We often talk about tracking your mileage and expenses for tax purposes. But, what are you supposed to do with it? Let’s go over the basics on reporting business mileage on your tax return.

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