Tag Archive for Tax Blog
In last month’s newsletter we presented some general facets of the Tax Cuts and Jobs Act (TCJA). In this article, we will explore some portions of the new bill in greater detail.
In general, the law cuts corporate tax rates permanently and individual tax rates temporarily. It permanently removes the individual mandate, a key provision of the Affordable Care Act, and it changes other policies in dramatic ways, such as the SALT deduction (which will be explained in more detail below). Read More
Thinking of moving to Mexico or Belize to live comfortably? Are you making an income in Mexico or the US you have not reported to the US government? Mexico has changed their tax laws and tax penalties and you need to be aware of them. Mexico now wants to know how much money you have in your US ban accounts.
You must be compliant and Maurice Glazer shares his experience working with taxpayers who decided to move to Belize or Mexico to live. Avoid getting arrested and having your US passport confiscated by being compliant. Read More
In general, a plan cannot specifically require that employees work for the company at least 1 year or attain the minimum age of 21. For large employers with several divisions, this can happen accidentally.
Here are two examples from the accompanying Treasury Regulations:
Example 1. Corporation A is divided into two divisions. In order to work in division 2 an employee must first have been employed in division 1 for 5 years. A plan provision which required division 2 employment for participation will be treated as a service requirement because such a provision has the effect of requiring 5 years of service. Read More
If you are an employee (i.e., a W-2 wage earner) with substantial work-related business expenses, the Act was not kind to you. It suspended (and effectively repealed), for 2018 through 2025, all miscellaneous itemized deductions, which were previously only subject to a floor of 2% of adjusted gross income (AGI). Employee business expenses are included in that category of miscellaneous itemized deductions. Read More
Many of you are wondering how the new tax rate changes will impact you. Obviously we can’t answer that off the top of our heads as each person’s situation is different, and in many cases experts are still trying to figure out how the changes will play out. One of the biggest changes is the corporate tax rate reduction to a maximum of 21% versus the maximum tax rate for individuals being around 37%. Read More
All taxpayers, whether individuals or not, may deduct as business expenses the costs relating to tax matters that are ordinary and necessary in the conduct of their trade or business under Section 162 of the Internal Revenue Code.
However, certain non-business expenses are also deductible under Section 212, “Expenses for production of income.” Notwithstanding the somewhat limiting title of Section 212, subsection (3) currently permits a deduction for non-business expenses that can have nothing to do with the production of income, namely expenses paid or incurred “in connection with the determination, collection or refund of any tax.” Read More
You have a tax practice and want to build clientele! What do you do?
What you must do is develop a smarter marketing strategy. The first step in any marketing development strategy is to place yourself in the mindset of a prospective client; start thinking like one!
Where would you go to find a tax advisor? You think a prospective client will go to FaceBook or LinkedIn to find a tax advisor? It is unlikely yet so many tax professionals are still wasting time and money on sites that yield no new clients for them. I know tax advisors who have spent thousands of dollars advertising and posting on sites and have never gained one new client. Read More
With the South Korean Winter Olympics just a week away, thousands of athletes are beginning to converge on the PyeongChang region and of participants from around the world are finalizing their physical and mental preparations. 2018 will bring out a projected 2,925 athletes from 92 countries into South Korea. The 2018 U.S. Olympic Team is comprised of 242 athletes (135 men, 107 women). For a number of reasons, including snow-deficiencies in the majority of countries (let’s ignore the Jamaican bobsled teams for the moment), the Winter Olympics are just as exciting, but a bit smaller-scale than the Summer Games. Compared to the 2016 Rio Summer Olympics, the Winter Games will feature about 70% less athletes from less than half as many countries. Read More
If you’re an American taxpayer who gets a paycheck, I imagine you’re pretty anxious to see how the new tax code is going to put more money into your pockets each pay period.
The IRS says they should have everything ready to reflect the changes by February. So, you could be seeing extra cash if you are in the top five tax brackets with your February paycheck. Read More
Although the drop of the corporate tax rate from a top rate of 35% to a flat rate of 21% may be one of the most talked about provisions of the Tax Cuts and Jobs Act (TCJA), C corporations aren’t the only type of entity significantly benefiting from the new law. Owners of noncorporate “pass-through” entities may see some major — albeit temporary — relief in the form of a new deduction for a portion of qualified business income (QBI). Read More
If you have been or are anticipating converting your traditional IRA to a Roth IRA, you should be aware of a tax trap that Congress built into the Act.
Background: There are two types of IRA accounts:
- Traditional IRA – Is a retirement plan that generally provides a taxpayer with a tax deduction when a contribution is made to the account. Then when distributions are taken from the account they are fully taxable, including earnings.
- Roth IRA – Is also a retirement plan, but unlike the traditional IRA, a Roth IRA does not provide a tax deduction for the contribution. Thus, once a taxpayer reaches retirement age, all of the distributions are totally tax-free.
Current Articles
Tax Policy Has A Powerful Impact On The EconomyWhile everyone is talking about the Heritage Foundations Project 2025, it is valuable to read the section on Tax Policy in Section 4, The Economy about the Department of Treasury which starts here: […]
Join Us Thursday July 18th For A CPE Webinar On § 174 UpdatesJoin us Thursday July 18th at 10 AM CST for a CPE Webinar on § 174 Updates. Participants will gain an understanding of the current landscape, legislative updates, and best practices for advising […]
Common Challenges When Claiming R&D Tax CreditsThe R&D tax credit is a governmental incentive designed to encourage research and development activities in the US. This credit offers a dollar-for-dollar reduction on federal taxes for […]
Foreign Housing Deduction: A Guide For Self-Employed US ExpatsLiving abroad as a self-employed U.S. expat comes with unique financial benefits, one of which is the Foreign Housing Deduction. This deduction can significantly lower your taxable income by allowing […]
Helping Some Taxpayers But With Much Complexity – SECURE Act 2.0 Sec. 115 Emergency WithdrawalsSECURE Act 2,0 with over 60 provisions mostly all related to retirement plans, was enacted December 29, 2022 as part of the Consolidated Appropriations Act, 2023 (P.L. 117-238). I maintain a table of […]
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