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How new tax law affects you 2018
- 1. BONNIE L. MACKEY, CPA, *CSEP, MBA, AEP® *CERTIFIED SPECIALIST IN ESTATE PLANNING How the New Tax Law May Affect You bonnie@lszcpa.com 954-985-8808
- 2. HURRICANE IRMA 2017 DISASTER AREA The Loss can be claimed for 2017 or by amending 2016 • Prepare an inventory of your losses • Obtain appraisals for large losses • Example – house or artwork • Exclusion is $500 vs. $100/10% AGI • Calculate on form 4684 • Transfer total to Sch. A Documentation is crucial- Keep pictures and receipts Deduction is for FMV BEFORE loss 20 year oak tree vs. new sapling Insurance proceeds reduce loss The loss is even added to standard deduction vs. itemizing
- 3. ITEMIZED DEDUCTION CHANGES9 out of 10 scenarios are better off in 2018 • #10 is due to 2106 changes • Unreimbursed business expenses no longer deductible on Sch. A • Ie. Home office, auto, supplies & biggy meals/entertainment • May need to consider: • Forming an entity for above expenses, but then how to fund • Having employer reimburse more expenses Business Meals & Entertainment Changes: Entertainment NO longer deductible Ie. Sporting tickets, concerts, golf Meals for entertaining clients still 50% Meals while traveling still 50% Office holiday parties and meals provided for employer convenience still 100%
- 4. ITEMIZED DEDUCTIONS (CONTINUED) Some changes expire in 2025 • State & local taxes limited to $10,000 • Ie. Real estate taxes, state income tax • Except for federal disasters, casualty losses no longer deductible • Charitable deductions increased limitation from 50% to 60% of AGI • Mortgage interest limited to indebtedness of $750,000 • No home equity interest deduction on new loans • Existing home equity int. allowed if original use was to improve home Standard Deductions & Personal Exemptions MFJ @ $24,000, SGL @ $12,000, HH $18k Personal exemptions eliminated, ie. $4k Individual tax rates: 10% up to $19k joint or $9,500 single 12% up to $77k joint or $38,700 single 22% up to $165k joint or $82,500 single 24% up to $315k joint or $157,500 single 32/35/37% up to $400k and $600k joint Capital Gains at 0, 15 and 20% 15% at $77k joint and $38,600 single 20% at $479k joint and $425,800 single
- 5. OTHER ITEMS Child Tax Credit • Increased to $2,000 per child • NEW credit of non-child dependents is $500 (ie. Friend) • Phase-out at $200k single/$400k joint • Child/dependent care credit stays • Must review dependency • Especially in divorce Alimony changes 2019 No longer includible or deductible Pre-existing agreements can choose to be subject to new or old rules for subsequent modifications
- 6. FOR YOUR TAX RX, WE SPECIALIZE & SERVICE OUR CLIENTS IN ALL FACETS OF: •Tax Planning •Financial Statements •Representation with the IRS & Florida Dept. of Revenue •Projections & Budgets •Estate & Trust Accounting/Tax •Guardianship Accounting Mitchell H. Silvey, CPA/Robert A. Zelko, CPA Bonnie L. Mackey, CPA, *CSEP, MBA, AEP® *Certified Specialist in Estate Planning 2699 Stirling Road, Suite B-205, Hollywood, Florida 33312-6543 954.985.8808 website: ‘www.lszcpa.com’ For all of Your Accounting & Tax Needs, Don’t Be Wacky, Call…..Bonnie Mackey!