There are a lot of things that have changed about the tax code.  Things that were deductible before that will no longer be, as well as things that could not be done in the past that now can be.  There’s a lot of confusion and it will take time for the public to slowly get used to things that they have turned into habits, keeping medical receipts, keeping traveling expenses, deducting moving expenses.  There is a lot that has changed, but the most important things haven’t changed  Organizing and record keeping are more than ever extremely important, and that’s the place that most of the people who are confused about the new tax rules have already got an ongoing deficit that they should[…]

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A tax extension is a request for more time to send returns to the federal and/or state taxing authorities in which you owe tax.  A request for more time is not an extension of more time to pay any tax due.  The federal and/or state taxing authorities need to receive 100% of all tax due by April 15th (or the actual filing deadline, if adjusted by weekend/holiday) each year in order to avoid penalties and interest charges.  Therefore, you the taxpayer has the responsibility of estimating whether you might owe tax. How could people know how much they will owe before the taxes are calculated? You are the only one who knows what you have earned, what has changed about[…]

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At this time of year many people who were getting a refund have already filed their tax return.  It leaves the remaining majority of folks who, despite having withholdings, are still going to owe additional tax.  We talk a great deal about tax planning and changing behaviors to achieve better outcomes in the future, but many are faced right now with a tax bill for the past (2017 tax year).  So what can be done?  Anything?  The answer is YES!  It’s actually simple and easy for most folks to substantially reduce the tax liability they are facing by opening a prior year IRA!  It’s is one of the very few ways the IRS allows you to retroactively affect your taxes.[…]

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The deadline for filing Partnership and S-Corporation tax returns is approaching quickly.  The deadline to file your business returns is March 15th, 2018 and unless they are filed by then they will be subject to fees and penalties. An extension will give you an additional six months to file business returns, so a business would not need to file until September 15th, 2018. The extension does not extend when the payment for taxes is due, if applicable in their state.  The payment of the taxes from pass through filings is due no later than April 15th, 2018.

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Today’s blog, though, is actually not part of the new rules, it’s part of the undoing of the thought process that comes with the tax collection and reporting system that we have created here in the U.S. (said tongue in cheek, as I had very little to do with it. In fact, nothing at all, I don’t believe).  This is the time of year where people are getting documents in the mail and the self-created mental pressure starts to build.  The required documents are mailed to you and the IRS says that you have to file your return by April 15th…hardly any time!!!!!!  However, they also offer you an extension, and the extension is: A. free, B. always granted under all[…]

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Last week we looked at how businesses could potentially save more by tax planning changes than what they would get from the 20% QBI  (qualified business Income) deduction next year.  The week before that we talked about mortgage deductions and planning tips. This week we are getting down to the “core” of the changes (cute right?) and what the taxpaying public really needs to get their arms around.  The talking heads on CNBC and some of the other more neutral media outlets are talking about the signs we are already seeing of confidence in the economy.  People are starting to see a little more in their paychecks this week, which brings a nice warm feeling this time of year.   Even[…]

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In our first Tax Code Changes blog, we spoke of IRA withdrawal behavioral changes, and last week we talked about mortgage planning tips under the new rules.  This week we will tackle something for the sole proprietor business owner who uses a Schedule C for business income reporting, as this applies to most small businesses in America.  The new rules have opened a window of controversy over a new IRS term of art called “QBI” or qualified business income.  Each pass-through business including sole proprietors will be able to deduct 20% of the net profit of their business before applying the tax when filing their personal return in 2019 for tax year 2018.  The rule limits that deduction to a[…]

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We`ll have lots to discuss over the next few weeks and months about the actions you might need to take because of the sweeping tax code changes.  The last topic was changing how you make your contributions to charity by doing direct transfers rather than the traditional, now old fashioned and less effective, way. Today we want to “tackle” (yup super bowl Sunday influences the bloggers) something that affects a large part of the population: mortgages! Like our charitable conversation two blogs ago, the mortgage interest deduction is also claimed on schedule A, so the first observation is that many people will simply no longer get any value from their mortgage interest because the new standard deduction is twice as much as[…]

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There are many ways a tax return can be done that are all OK with the IRS, but only  one of those ways nets the largest refund!  People need to understand this across America, and we talk about tax planning constantly.  We blog, tweet, post, e-mail and on and on, yet we as an industry are not even getting 10% of the public to take on tax planning!  The clients who do are often thrilled at the outcomes, and yet it’s just hard to get people to want to spend half the time that they spend planning their vacations on planning their own tax outcomes! (larger refunds would pay for those vacations?!?!) Planners  offices often don’t look like a franchise[…]

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Well, there are so many nuances to the new tax rules that we thought we would break them down over the next few weeks and cover a rule change a week, and then practical examples.  The news has covered the doubleing of the standard deduction to death, but knowing it happened doesn’t really help much.  What do you do about it?  Anything at all or just enjoy?  One practical matter would be thinking about what got listed on Schedule A of the return, and can you shift any of those expenses to other places on the return so that you not only get the new higher deduction but some additional benefit?  Probably.  Take, for instance, your charitable contributions, which are[…]

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