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Archives for February 2019

2019 – 02/12 – 3 big TCJA changes affecting 2018 individual tax returns and beyond

When you file your 2018 income tax return, you’ll likely find that some big tax law changes affect you, besides the much-discussed tax rate cuts and reduced itemize deductions. For 2018 through 2025, the TCJA: 1) eliminates personal exemptions, 2) increases the standard deduction and 3) expands the child credit. The degree to which these changes will affect you depends on whether you have dependents and, if so, how many. It also depends on whether you typically itemize deductions. We can help ensure you claim all of the breaks available to you on your 2018 return.

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2019 – 02/05 – Why you shouldn’t wait to file your 2018 income tax return

The IRS opened the 2018 income tax return filing season on Jan. 28. Consider filing as soon as you can, even if you typically don’t file this early. It can help protect you from tax identity theft, in which a thief files a return using your Social Security number to claim a bogus refund. If you file first, it will be returns filed by any would-be thieves that are rejected by the IRS, not yours. Other benefits: You’ll get your refund sooner or, if you owe tax, you’ll know how much you owe sooner so you can be ready to pay it by April 15. Contact us with questions.

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2019 – 02/11 – When are LLC members subject to self-employment tax?

Limited liability company (LLC) members commonly claim that their distributive shares of LLC income (after deducting compensation for services in the form of guaranteed payments) aren’t subject to self-employment (SE) tax. But the IRS has been seeking back taxes and penalties from LLC members it claims have underreported SE income, with some success in court. At the greatest risk are LLC members who are comparable to general partners in a partnership. We can help you assess whether the IRS might successfully claim that you’ve underpaid SE taxes.

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2019 – 02/04 – Fundamental tax truths for C corporations

The flat 21% federal income tax rate for C corporations under the Tax Cuts and Jobs Act has been great news for these entities and their owners. But some fundamental tax truths for C corporations largely remain the same. For example, although the 21% rate will lower the impact, double taxation is still an important issue to consider, especially if a C corporation owns assets that are likely to appreciate significantly. And C corporation status still generally isn’t advisable for ventures that will incur ongoing tax losses. Have questions? Contact us.

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2019 – 01/29 – Investment interest expense is still deductible, but that doesn’t necessarily mean you’ll benefit

Can the investment interest expense deduction save you tax on your 2018 return? It’s for interest on debt used to buy assets held for investment, and you must pass some hurdles to benefit. First, you must itemize, which may no longer benefit you because of the higher standard deduction. Second, interest incurred to produce tax-exempt income, such as from municipal bonds, isn’t deductible. Finally, the deduction is generally limited to your taxable interest income, nonqualified dividends and net short-term capital gains for the year. Contact us for more details.

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2019 – 02/01 – Private companies: Have you implemented the new revenue recognition standard?

Private companies that follow Generally Accepted Accounting Principles (GAAP) must use an updated five-step method to recognize revenue beginning in 2019. Public companies that made the switch in 2018 report that the process was more difficult than expected. The standard required them to comb through contracts, make subjective judgment calls and offer paper trails to back up their estimates to auditors. If you haven’t started implementing this landmark standard, we can help prepare your revenue reporting systems, processes and policies.

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