6 Last-Chance Tax Breaks: Do You Qualify?

January 31, 2018
Tax breaks

The new tax law will suspend or modify several popular tax breaks.

The new Tax Cuts and Jobs Act (TCJA) significantly changes some parts of the tax code that relate to personal tax returns. In addition to lowering most of the tax rates and increasing the standard deduction, the TCJA repeals, suspends or modifies some valuable tax deductions. As a result, millions of Americans who have itemized deductions in the past are expected to claim the standard deduction for 2018 through 2025.

The TCJA provisions for individuals generally take effect for the 2018 tax year and “sunset” after 2025. That means that they technically expire in eight years unless Congress takes further action. In the meantime, you still have a shot at several key tax deductions on your 2017 return before they’re scheduled to expire. This is the return you must file or extend by April 17, 2018.

Here are six popular federal income tax breaks that will be suspended or modified by the new law. Generally, prior law continues to apply to these deductions for your 2017 tax year, so you can write off the expenses with little or no limitation for 2017.

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Let’s Take a Closer Look at New Business Tax Reforms

January 29, 2018
Business tax reform

Find out how the new tax law will be working for your business.

The Tax Cuts and Jobs Act (TCJA) provides businesses with more than just lower income tax rates and other provisions you may have heard about. Here’s an overview of some lesser-known, business-friendly changes under the new law, along with a few changes that could affect some businesses adversely. Read more

Spotlight on Pass-Through Entities under the Tax Cuts and Jobs Act

January 24, 2018
pass-through entities

Pass-through entity rules will change under the new tax law.

Will pass-through entities still be popular under the Tax Cuts and Jobs Act (TCJA)? The tax rules for pass-through entities, including S corporations, limited liability companies (LLCs), partnerships and sole proprietorships, have generally become more beneficial — but also more confusing under the new law.

So which type of entity is best for your business? The answers depend on several factors, which are explained in this article. Read more

Legislative Alert: HSAs in Maryland are in Jeopardy

January 23, 2018

The Contraceptive Equity Act was enacted by the Maryland General Assembly in 2016. Effective January 1, 2018, the Act mandates that male contraceptive services (vasectomies) must be covered as a preventive service, i.e., without any deductible or cost-sharing required. The current problem lies in the application of the Act to a high deductible health plan (HDHP). An HDHP is typically coupled with a health savings account (HSA). Read more

IRS Releases New Withholding Tables: Employees Could See Changes Soon

January 22, 2018
Withholding Tables

The new tax withholding tables need to be implemented by Thursday, February 15th, 2018.

On January 11, the IRS released updated 2018 income tax withholding tables, which reflect changes made by the new Tax Cuts and Jobs Act. This is the first in a series of steps that the IRS will take to help improve the accuracy of withholding following major changes made by the new tax law, the IRS stated.

The updated withholding information, shows the new rates for employers to use during 2018. Employers should begin using the 2018 withholding tables as soon as possible, but not later than February 15, 2018. They should continue to use the 2017 withholding tables until implementing the 2018 withholding tables. Read more

Tax Cut Law: Mostly Good News for Employers and Employees

January 17, 2018

Tax CutThe most immediate concrete change the Tax Cuts and Jobs Act (TCJA) will bring about for employers is new payroll tax withholding rates. Here’s the latest word from the IRS: “We anticipate issuing the initial withholding guidance in January reflecting the new legislation, which would allow taxpayers to begin seeing the benefits of the change as early as February. The IRS will be working closely with the nation’s payroll and tax professional community during this process.” Read more

Foreign Mutual Funds & Passive Foreign Investment Companies

January 10, 2018

By Bethany Bouw

Many with foreign investments have ownership of foreign mutual funds. This can cause a world of problems from a US tax perspective. There are significant differences between the US tax treatment of domestic mutual funds and foreign mutual funds. Foreign mutual funds are almost always considered to be passive foreign investment companies (PFICs). PFICs are a serious matter and require great consideration with reporting and elections. There are serious disadvantages to each method of treatment so it is vital to contact a tax professional who can assist. Read more

Departure Permits – Clearance for Aliens Departing the US

January 10, 2018
Departure Permits

There are two form options for resident and non-resident aliens to consider in regards to departure permits.

By Bethany Bouw

There are special considerations for resident aliens and nonresident aliens when leaving the United States (and US Possessions). When aliens depart the US, they need to have a certificate of compliance to document the following things:

  • Report the income (actual and expected) for the tax year and pay the taxes expected as required,
  • That the resident alien’s open taxable period’s US income tax obligations are satisfied, or
  • That there is no taxable income from US sources for the nonresident alien.

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Big Accounting Rule Changes Coming Soon

January 2, 2018
Accounting Rule

Major changes are coming to the U.S. Generally Accepted Accounting Principles (GAAP) in the new year.

As you scramble to get up-to-date on changes to the federal tax rules under the Tax Cuts and Jobs Act, there also will be major changes to U.S. Generally Accepted Accounting Principles (GAAP). Here’s an overview of the major accounting rules that will change over the next few years. These changes are likely to require updates to your record keeping practices and accounting systems, so you can’t afford to wait until the last minute to implement them. Read more

How Might the New Tax Reform Law Affect You

January 2, 2018
Tax Reform

Now that the tax reform bill has passed, see how it might affect you.

President Trump and Republican members of Congress say the Tax Cuts and Jobs Act (TCJA) will bring $3.2 trillion in tax cuts. Now that the bill has passed, everyone wants to know how much they’ll save.

Unfortunately, the tax bill won’t be good news for everyone. Here’s a comparison of how tax results for a typical family of four might be affected by the tax law changes, which generally are effective for tax years beginning after December 31, 2017. Read more