Stop tax identity theft

Don’t be a victim of tax identity theft: File your 2017 return early

TAX IDENTITY THEFT

The IRS has just announced that it will begin accepting 2017 income tax returns on January 29. You may be more concerned about the April 17 filing deadline, or even the extended deadline of October 15 (if you file for an extension by April 17). After all, why go through the hassle of filing your return earlier than you have to?

But it can be a good idea to file as close to January 29 as possible: Doing so helps protect you from tax identity theft. Read More >

Deadline for ACA information reporting

IRS extends deadlines for ACA information reporting

ACA Information Reporting

Under the Affordable Care Act (ACA), certain employers must report health care plan information to the IRS and employees. Specifically, Forms 1094/1095-B (B Forms) and Forms 1094/1095-C (C Forms) may need to be submitted for the 2017 tax year. The agency recently extended submission deadlines for these forms under some circumstances. Let’s delve into the details. Read More >

529 plans in estate planning

Tax Cuts and Jobs Act expands appeal of 529 plans in estate planning

It’s common for grandparents to want to help ensure their grandchildren will get a high quality education. And, along the same lines, they also want the peace of mind that their wealth will be preserved for their children and grandchildren after they’re gone. If you’re facing these challenges, one option that can help you conquer both is a 529 plan. And it’s become even more attractive under the Tax Cuts and Jobs Act (TCJA). Read More >

individual tax rates

Most individual tax rates go down under the TCJA

The Tax Cuts and Jobs Act (TCJA) generally reduces individual tax rates for 2018 through 2025. It maintains seven individual income tax brackets but reduces the rates for all brackets except 10% and 35%, which remain the same. It also makes some adjustments to the income ranges each bracket covers. For example, the 2017 top rate of 39.6% kicks in at $418,401 of taxable income for single filers and $470,701 for joint filers, but the reduced 2018 top rate of 37% takes effect at $500,001 and $600,001, respectively. Read More >

Clock money gears

Your 2017 tax return may be your last chance to take the “manufacturers’ deduction”

While many provisions of the Tax Cuts and Jobs Act (TCJA) will save businesses tax, the new law also reduces or eliminates some tax breaks for businesses. One break it eliminates is the Section 199 deduction, commonly referred to as the “manufacturers’ deduction.” When it’s available, this potentially valuable tax break can be claimed by many types of businesses beyond just manufacturing companies. Under the TCJA, 2017 is the last tax year noncorporate taxpayers can take the deduction (2018 for C corporation taxpayers). Read More >

Tax Cuts and Jobs Act button

Tax Cuts and Jobs Act: Key provisions affecting estate planning

The Tax Cuts and Jobs Act of 2017 (TCJA) is a sweeping revision of the tax code that alters federal law affecting individuals, businesses and estates. Focusing specifically on estate tax law, the TCJA doesn’t repeal the federal gift and estate tax. It does, however, temporarily double the combined gift and estate tax exemption and the generation-skipping transfer (GST) tax exemption.

Beginning after December 31, 2017, and before January 1, 2026, the combined gift and estate tax exemption and the generation-skipping transfer (GST) tax exemption amounts double from an inflation-adjusted $5 million to $10 million. For 2018, the exemption amounts are expected to be $11.2 million ($22.4 million for married couples). Absent further congressional action, the exemptions will revert to their 2017 levels (adjusted for inflation) beginning January 1, 2026. The marginal tax rate for all three taxes remains at 40%. Read More >

real_estate_taxes

IRS Disallows Prepayment of 2018 Real Estate Taxes

There has been substantial information in the news lately regarding prepaying next year’s real estate taxes in order to accelerate a tax deduction into 2017.  The IRS issued an advisory on December 27, 2017 basically stating that making a “deposit” for taxes to be assessed in the future does not constitute a current deductible expense for income taxes.  Here are our observations for paying real estate taxes:

  1. For Wisconsin residents, generally consider paying the real estate tax bill you received in early December by the end of the year.  However, if you are subject to alternative minimum tax in 2017, there may be no advantage to doing so.
  2. For residents of other states, it depends on the assessment period, and when you actually have a legal obligation to pay the real estate taxes.
  3. Just because your municipality has a method for making a deposit of future real estate taxes does not make such payment deductible in 2017.

Everyone’s tax situation is unique.  Please consult with our tax professionals to understand what options provide the best tax benefits to reduce your income tax burden in both 2017 and 2018.

IRS Advisory: Prepaid Real Property Taxes May Be Deductible in 2017 if Assessed and Paid in 2017

Pat Wirth, CPA, Partner
262-522-8255

fed govt

The 2017 Tax Cuts and Jobs Act (H.R. 1)

The 2017 Tax Cuts and Jobs Act was signed into law on December 22, 2017.  The linked publication highlights the key changes and planning opportunities of individuals and businesses: CCH House-GOP-Tax-Cuts-Job-Act.

Chortek’s tax department is analyzing the impact of the tax law changes for our individual and business clients. We will expeditiously be developing strategies as additional clarification is published on the intricacies of the tax bill.

In the meantime, do not hesitate to reach out to our tax team with your questions.

See also “Why you may want to accelerate your property tax payment into 2017

 

 

Property Tax sign

Why you may want to accelerate your property tax payment into 2017

Accelerating deductible expenses, such as property tax on your home, into the current year typically is a good idea. Why? It will defer tax, which usually is beneficial. Prepaying property tax may be especially beneficial this year, because proposed tax legislation might reduce or eliminate the benefit of the property tax deduction beginning in 2018.

Proposed changes

The initial version of the House tax bill would cap the property tax deduction for individuals at $10,000. The initial version of the Senate tax bill would eliminate the property tax deduction for individuals altogether. Read More >

Tax Break for Hiring Veterans

2017 might be your last chance to hire veterans and claim a tax credit

With Veterans Day on November 11, it’s an especially good time to think about the sacrifices veterans have made for us and how we can support them. One way businesses can support veterans is to hire them. The Work Opportunity tax credit (WOTC) can help businesses do just that, but it may not be available for hires made after this year.

As released by the Ways and Means Committee of the U.S. House of Representatives on November 2, the Tax Cuts and Jobs Act would eliminate the WOTC for hires after December 31, 2017. So you may want to consider hiring qualifying veterans before year end. Read More >