Tax and Accounting Newsletter - Gig Harbor Tax and Accounting
Congress Reinstates Expired Tax Provisions
Congress let many tax provisions expire on December 31, 2017, making them dead for your already-filed 2018 tax returns.
In what has become a much too common practice, Congress resurrected the dead provisions retroactively to January 1, 2018. That’s good news. The bad news is that if you have any of these deductions, we have to amend your tax returns to make this work for you.
And you can relax when filing your 2019 and 2020 tax returns because lawmakers extended the “extender” tax laws for both years. Thus, no worries until 2021—and even longer for a few extenders that received special treatment.
Eight Changes in the SECURE Act You Need to Know
As has become usual practice, Congress passed some meaningful tax legislation as it recessed for the holidays. In one of the new meaningful laws, enacted on December 20, you will find the Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act).
The SECURE Act made many changes to how you save money for your retirement, how you use your money in retirement, and how you can better use your Section 529 plans. Whether you are age 35 or age 75, these changes affect you.
Here are eight of the changes:
Kiddie Tax Changes
In December 2017, Congress enacted the Tax Cuts and Jobs Act (TCJA) and changed how your children calculate their tax on their investment-type income. The TCJA changes led to much higher tax bills for many children.
Solo 401(k) Could Be Your Best Retirement Plan Option
Have you procrastinated about setting up a tax-advantaged retirement plan for your small business? If the answer is yes, you are not alone.
Still, this is not a good situation. You are paying income taxes that could easily be avoided. So consider setting up a plan to position yourself for future tax savings.
For owners of profitable one-person business operations, a relatively new retirement plan alternative is the solo 401(k). The main solo 401(k) advantage is potentially much larger annual deductible contributions to the owner’s account—that is, your account. Good!
Does No 1099 Mean No Deduction for You?
Imagine this: you didn’t issue Form 1099s to your contractors. Now, the IRS is auditing your tax return, and the auditor claims you lose your deductions because you didn’t issue the Form 1099s. Is this correct?
IRS Issues New Bitcoin Tax Guidance
The IRS recently issued new cryptocurrency guidance and is hot on your trail if you bought and sold cryptocurrency and didn’t report it on your tax return.
Divorce-Related Tax Issues for Small-Business Owners
As with all financial transactions, divorce comes with tax consequences. And those consequences have changed for tax years 2018 and later thanks to the Tax Cuts and Jobs Act (TCJA).
Tax Tips for the Self-Employed Age 50 and Older
If you are self-employed, you have much to think about as you enter your senior years, and that includes retirement savings and Medicare. Here a few thoughts that will help.
Tax Issues of Converting Your Residence into a Rental Property
The simple maneuver of converting your personal residence to a rental property brings with it many tax rules, mostly good when you know how they work.
Know Whether Your Trip Is a Deductible Business Expense
To help you understand business travel, consider this:
You planned a personal trip to Los Angeles, arriving on Friday afternoon and leaving on Sunday afternoon.
About a week later, you learn that a vendor you need to meet with is going to be in L.A. when you are. You arrange a dinner on Friday night to finalize negotiations on a large contract.
Can you now deduct 100 percent of your flight expenses to Los Angeles? How about meals?
Please let us know if you have any questions about this. We are here to help.
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In This Issue: Tax Reform Provides New 20% Deduction, Phase-Out For New 20% Deduction, Tax Reform Destroys Entertainment Deductions
For Businesses, Tax Benefit For Business Vehicle Trade-In Eliminated
June 2015 - Volume 2 Issue 2
In This Issue: Large Penalties For Employers Reimbursing Individual Health Insurance Premiums, Employer Payment Plans,
Obamacare Changes Everything (ACA), IRS issued Notice 2015-17 – Penalty Relief
January 2015 - Volume 2 Issue 1
In This Issue: ACA Advice, Filing Early, Standard Mileage Rates, and Quick Tips
January 2014 - Volume 1 Issue 1
In This Issue: 2013 Tax Impact from Legislation is beginning to take its Place