by Blair Butters | Jul 20, 2018 | Uncategorized
The Tax Cuts and Jobs Act (TCJA) is now in full force and has made significant changes to the U.S. tax code for both individuals and businesses since it was signed by President Trump on December 22, 2017. Though we’ve been living with the major reform for several months, the uncertainty surrounding the changes and their effects are still highly prevalent. We’ve put together a guide comparing the new and old laws of the top 8 provisions to help flesh out the uncertainty of the reform and to help you understand how the TCJA could impact your take-home pay and tax refund this year. [Related Article: New Federal Law Brings Changes to Business Taxes] 1. Individual Tax Rates The TCJA has kept the seven-bracket structure, however, the income tax rates have decreased. Comparable rates are as follows: 2. Individual Alternative Minimum Tax Old: The AMT exemption amount was $54,300 for single filers and $84,500 for married taxpayers filing jointly. New: The AMT exemption amounts increased to $70,300 for single filers and $109,400 for married taxpayers filing jointly. 3. Standard Deduction & Personal Exemptions A standard deduction is the portion of income that is not subject to tax and can be used to reduce a taxpayer’s tax bill. A personal exemption is the amount taxpayers can deduct from their income for every taxpayer and most dependents claimed on their return. Old: Single taxpayers were allowed a standard deduction of $6,350 and $12,700 for married taxpayers filing jointly. Personal exemptions of $4,050 were allowed for each family member. New: Single taxpayers are allowed a standard deduction of $12,000 and $24,000 for...
by Blair Butters | Apr 24, 2018 | Uncategorized
As a nation over a quarter of us procrastinate when it comes to tax season, stalling until the last couple of weeks to prepare taxes before the deadline. For those who missed the April 17 Tax Day deadline altogether, here’s what you can still do. If you requested an extension before Tax Day, it pushes the deadline back six months and allows for you to have additional time to finish your taxes. Since the deadline this year was April 17, 2018, the filing deadline will be pushed back until October 15, 2018. Note that the extension of time to file is not an extension of time to pay. Failure to pay and interest charges will still apply if you filed an extension and have an amount due on your 2017 taxes. If you didn’t file for an extension in time, there is still a chance you will not be penalized. Expecting a refund? You won’t be penalized. If you expecting a refund from the IRS, there is no need to panic, but get your late return in as soon as you possibly can. For taxpayers who are expecting a refund, there isn’t a penalty for not filing your taxes by the deadline and you do not need to ask for an extension! You will have until October 15, 2018 to submit your late return. Owe payment to the IRS? File your return ASAP. Now, if you are filing a late return when you owe tax payments to the IRS, you will receive a late payment penalty plus interest on the amount that was due by Tax Day deadline. Even...
by Blair Butters | Feb 19, 2018 | Uncategorized
There will always be a crowd of taxpayers who wait until the last minute in April to file federal income tax returns. While there are benefits such as receiving your tax refunds faster, there are other helpful perks to submitting your taxes as soon as possible including the following: Preventing tax return identity theft Extra time to pay your taxes Obtaining vital information for financial planning Preventing tax return identity theft When filing early, this may not eliminate the possibility of identity theft but it will protect your refund from falling into the wrong hands. Most cases of tax-related identity theft occur early in the tax season. When an identity thief files a return using your Social Security before you get the chance, the IRS will automatically deny access to your tax return because they assume that you have already filed it. It is important to highlight that once a criminal has access to your Social Security number, that is all they need to file in your name. In this case, you will have to file a paper return and your refund will be delayed several months. Extra time to pay your taxes As a taxpayer, you may be facing a tax bill rather than a refund. Many assume that by putting of filing as long as possible will help you save money in time for the last minute mid-April. If you file your taxes early, you will be at an advantage of knowing exactly how much you owe the IRS, without having to pay in full until April’s filing deadline. Knowing your amount due earlier will...
by Blair Butters | Dec 28, 2017 | Uncategorized
By now you have most likely heard that President Trump signed the Tax Cuts and Jobs Act on December 22, 2017. Most of the conversation regarding the new law has revolved around the changes to personal tax rates and deductions. You may have also heard about the corporate tax rate reduction for corporations and pass-through businesses. Like any other bill, there are other changes in the bill that have not garnered as much attention; however, some of these items will most likely affect your business taxes and indirectly your personal taxes. We have selected three provisions that might affect your business taxes. Like-Kind Exchange Treatment The new law allows “like-kind” exchange treatment only for real property transactions. Like-kind exchange treatment will not be applicable for transactions involving personal property, for example, equipment. A typical example of this type of transaction was to trade in one business vehicle for a new business vehicle. Under current law, no gain or loss is recognized from the transaction. Under the new law, you will have to recognize the gain/loss on the sale of the vehicle. If you are looking to implement a like-kind exchange for business-related real estate, you can do that provided you meet all of the criteria. Depreciation Related Deductions The act allows for greater opportunities for expensing fixed asset purchases, mainly related to equipment purchases; however, some real property improvements are also included. The act allows for 100% first-year expensing deduction for qualified property, which generally means brand new tools and equipment, however, some types of real property improvements also qualify. This is applicable to assets acquired after September 27, 2017,...
by Blair Butters | Sep 25, 2017 | Uncategorized
Autumn. The leaves are turning, the air is getting cooler, and pumpkin lattes are in every cafe in sight. The year is starting to wind down and you might be feeling behind on your small business tax preparation. As the end of year approaches, it’s important to get caught up with all of your finances so you can properly assess your financial situation while there is still time to make purchases before the end of the tax year if that’s what’s necessary. If you haven’t been preparing as you go, this is a great time to take an hour each week to catch up. You’ll be able to tally your expense reports or review receipts and modify records. You not only want to be prepared to submit your taxes but also capitalize on deductions. Now is the time to implement strategies that will ensure your small business is in a secure place for the upcoming tax season. End-of-Year Payroll Reviewing this year’s payroll may be easier to do before the end of the year than at the start of the new year. Overlapping end-of-year payroll with the new-year payroll could result in confusion. Ensure you are gathering the correct information for W-2 forms and taxable fringe benefits. If you plan to give your employees end-of-year bonuses, do so by year-end so that they are included in your employees’ income for that year. Quarter four (Q4) is also a great time to verify all of your benefits and employee payroll information is correct. It is important to detail out your payroll to avoid penalties for late, incorrect, or incomplete submissions....
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