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And that’s in a “routine” climate.
But the current business climate is anything but predictable, as tax reform has left even MORE unanswered questions. This Biz Café is here to help you rest assured that your business entity has the right designation for maximum cash flow.
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And he’s joining us for the January Biz Café, called “Is My Entity that I Selected Pre-Tax-Reform Still the Right Vehicle?”
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• With the new 21 percent corporate tax rate, should I be a C corporation?
• How do I maximize the 20 percent 199A deduction as an S corporation?
• Should everyone be an LLC so we don’t have to pay wages?
• I am a professional services firm; how do I structure my affairs to minimize taxes?
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The Trump tax reform is confusing. This presentation will review what businesses and individuals need to know about the changes in the tax law and how those changes impact tax liabilities.
At the Eurocham Tax Forum this presentation covers Small Taxpayer registration in Cambodia and issues small taxpayers are currently facing. As a clarification, the GDT representatives in the audience stated Small Taxpayers should issue Commercial Invoices and there is no input credit for goods and services charged by Small Taxpayers, i.e. registered taxpayers can not claim a vat credit on an invoice from small taxpayers.
NCET Biz Cafe | Mike Bosma, Is My Entity Still the Right Vehicle? | Jan 2019Archersan
C Corp, S Corp, LLCs and beyond: The alphabet soup that comprises business designations can leave you with questions — lots of questions.
And that’s in a “routine” climate.
But the current business climate is anything but predictable, as tax reform has left even MORE unanswered questions. This Biz Café is here to help you rest assured that your business entity has the right designation for maximum cash flow.
Get a jump start on tax season with this presentation that will help you secure answers to your tax and deduction questions. Mike Bosma is our guest, who has been the Reno office Principal in Charge since joining CliftonLarsonAllen in January 2017. He has been in public accounting specializing in taxation for more than 24 years and is dedicated to assisting taxpayers attain higher levels of success through proactive tax planning, creative restructuring and strategic business solutions.
And he’s joining us for the January Biz Café, called “Is My Entity that I Selected Pre-Tax-Reform Still the Right Vehicle?”
Here are some questions that may just be keeping you as a business owner up at night:
• With the new 21 percent corporate tax rate, should I be a C corporation?
• How do I maximize the 20 percent 199A deduction as an S corporation?
• Should everyone be an LLC so we don’t have to pay wages?
• I am a professional services firm; how do I structure my affairs to minimize taxes?
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Taxation of salaries has been lowered drastically - personal income tax and military levy make 6.5% combined and around USD 50 shall be paid as a social security tax. For high salaries, this may mean that an effective tax rate will be in the range of 7-8% which is pretty competitive globally, leave alone EU and Eastern Europe.
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As 2020 nears completion, we discuss what automotive dealerships need to record and what files need to be kept in order to ensure that 2020 is closed properly and that the new year starts off right.
The Tax Cuts and Jobs Act has now passed, which enacts the biggest tax reform law in thirty years. Citrin Cooperman's Federal Tax Policy Team recently hosted a webinar discussing what you need to know to begin planning and steps you can be taking to be prepared. The conversation focused on the following key areas:
Business
Corporate
Pass-Through Entities
International
Individuals
State and Local Implications
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Big hopes for the digital economy in Ukraine, aiming at 10% GDP in 3-5 years. To achieve that the government introduced favorable taxation as a part of its Diia City legal regime.
Companies will be able to choose 9% distributed profit tax - basically not to pay any corporate tax in case there is no distribution of profits like dividends, or some other forms. An option to choose net profit tax at 18% will remain as well if an IT company is willing to do so.
Taxation of salaries has been lowered drastically - personal income tax and military levy make 6.5% combined and around USD 50 shall be paid as a social security tax. For high salaries, this may mean that an effective tax rate will be in the range of 7-8% which is pretty competitive globally, leave alone EU and Eastern Europe.
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During this webinar, we discussed how to potentially mitigate the impact of the state and local tax (SALT) cap at the federal level. New York State has joined the list of states that have enacted an elective pass-through entity tax in an effort to do just that. We also dove into the possibility of changing residency to a low-tax or no-tax state. With state tax rates on the rise in some places and the realization that remote work is doable, many individuals are contemplating making a move. To succeed in making a change like this, one must be aware of the technical rules and be willing to significantly adjust one’s life. We talked through all these considerations.
The passage of the Tax Cuts and Jobs Act will have widespread and long lasting implications throughout the country and will change how most taxpayers will prepare their tax returns. Citrin Cooperman recently hosted a seminar in Philadelphia to provide insight on where we are now, how we plan to move forward, and how the new law will impact your overall business and tax strategies. Join us to get answers to questions in the following areas:
Corporate and Businesses
Pass-Through Entities
International Issues
Individuals
Military Families Learning Network Webinar - his 90-minute webinar will review a variety of time-tested tax and financial planning strategies including offsetting investment capital gains with capital losses, bunching itemized tax deductions, making charitable contributions, accelerating or delaying income, using up flexible savings account (FSA) balances, adjusting income tax withholding, and maximizing contributions to tax-deferred employer retirement savings plans such as 403(b) plans and the Thrift Savings Plan (TSP). This webinar is presented on behalf of the Military Families Learning Network. https://learn.extension.org/events/1675
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Listen to the explaination behind the slides. Watch the full recording of this free webinar here --> https://register.gotowebinar.com/register/7354592984523668995
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When listening about building new Ventures, Marketplaces ideas are something very frequent. On this session we will discuss reasons why you should stay away from it :P , by sharing real stories and misconceptions around them. If you still insist to go for it however, you will at least get an idea of the important and critical strategies to optimize for success like Product, Business Development & Marketing, Operations :)
Reflect Festival Limassol May 2024.
Michael Economou is an Entrepreneur, with Business & Technology foundations and a passion for Innovation. He is working with his team to launch a new venture – Exyde, an AI powered booking platform for Activities & Experiences, aspiring to revolutionize the way we travel and experience the world. Michael has extensive entrepreneurial experience as the co-founder of Ideas2life, AtYourService as well as Foody, an online delivery platform and one of the most prominent ventures in Cyprus’ digital landscape, acquired by Delivery Hero group in 2019. This journey & experience marks a vast expertise in building and scaling marketplaces, enhancing everyday life through technology and making meaningful impact on local communities, which is what Michael and his team are pursuing doing once more with Exyde www.goExyde.com
What You're Going to Learn
- How These 4 Leaks Force You To Work Longer And Harder in order to grow your income… improve just one of these and the impact could be life changing.
- How to SHUT DOWN the revolving door of Income Stagnation… you know, where new sales come into your magazine while at the same time existing sponsors exit.
- How to transform your magazine business by fixing the 4 “DON’Ts”...
#1 LEADS Don’t Book
#2 PROSPECTS Don’t Show
#3 PROSPECTS Don’t Buy
#4 CLIENTS Don’t Stay
- How to identify which leak to fix first so you get the biggest bang for your income.
- Get actionable strategies you can use right away to improve your bookings, sales and retention.
Best Crypto Marketing Ideas to Lead Your Project to SuccessIntelisync
In this comprehensive slideshow presentation, we delve into the intricacies of crypto marketing, offering invaluable insights and strategies to propel your project to success in the dynamic cryptocurrency landscape. From understanding market trends to building a robust brand identity, engaging with influencers, and analyzing performance metrics, we cover all aspects essential for effective marketing in the crypto space.
Also Intelisync, our cutting-edge service designed to streamline and optimize your marketing efforts, leveraging data-driven insights and innovative strategies to drive growth and visibility for your project.
With a data-driven approach, transparent communication, and a commitment to excellence, InteliSync is your trusted partner for driving meaningful impact in the fast-paced world of Web3. Contact us today to learn more and embark on a journey to crypto marketing mastery!
Ready to elevate your Web3 project to new heights? Contact InteliSync now and unleash the full potential of your crypto venture!
Salma Karina Hayat is Conscious Digital Transformation Leader at Kudos | Empowering SMEs via CRM & Digital Automation | Award-Winning Entrepreneur & Philanthropist | Education & Homelessness Advocate
3. Tax Reform Update
Timeline of Reform Legislative Path
Nov. 2:
Ways and Means Releases
First Draft Bill
Nov. 6
Ways and Means Begins
Mark-Up
Nov. 16
House Vote
SENATE
Week of Nov. 6
Senate Finance Chairman
Release Bill
Week of Nov. 27
Senate Bill Mark-Up,
Amendments and Debate
Dec. 2
1:51AM
Senate Vote
December 15:
Resolved Differences. Send
back to House and Senate for
Vote
CONFERENCE COMMITTEE WHITE HOUSE
Dec 22, 2017
President Signs P.L. 115-97
3
5. Corporate Tax Rate Reduction
Highest rate drops from 35% to 21%
Old Law
o Corporate Tax Rates graduated up to a max of 35%, personal services
taxed at max 35%
o Subject to AMT
New Law
o Corporate Tax Rates lowered to flat 21%, no special rate for personal
service corporations
o AMT is repealed
o Permanent change, no expiration
5
7. Pass-through Entity Deduction
20% Pass-through deduction
Old Law - No special deduction for pass-through entities
New Law - New below the line 20% deduction for pass-through entities
o S Corporations, Partnerships, Sole Proprietorships
o Must have “qualified business income” (QBI) from a trade or business
QBI does not include income earned as an employee
e.g. S Corp owners pays himself W-2 wages
7
8. Pass-through Entity Deduction
20% Pass-through deduction (continued)
New Law - continued
o Subject to limits and exclusions unless your overall taxable income is
less than $157,500 (single) or $315,000 (married filing joint)
o If income is over the limits, then:
QBI cannot be from specified service businesses such as law,
medicine, accounting, consulting, investment services, etc.
o Architecture & engineering are not specified service businesses
Deduction allowed only if business has W-2 wages and/or tangible
property in use by the business to produce income
Phaseout range is $50,000 for single and $100,000 for married
filing joint
8
9. Pass-through Entity Deduction
20% Pass-through deduction (continued)
New Law - continued
o Way too early to have solid guidance
o Many commentators expect further legislation to clarify the
deduction
o New Sec 199A Replaces old Sec 199 Domestic Production Activities
Deduction
9
13. Sec 179 Expensing & Bonus Depreciation
Bonus Depreciation
Old Law – 50% of basis of qualified property
o Only new purchases, no used items
o Personal property and limited types of real estate improvements
o Scheduled to be phased out by 2020
New Law – 100% expensing from 9/27/17 through 2022,
o Allowed for new and used property
o Personal property and a larger group of eligible real estate improvements
including most interior improvements
o Phased out from years 2023 – 2028
13
14. Sec 179 Expensing & Bonus Depreciation
Cost Recovery – Section 179
Old Law – Election to expense up to $510,000 of qualifying property in 2017
instead of depreciating it over time
o $510,000 cap is reduced dollar for dollar for all property in excess of
$2,030,000 placed in service in 2017
o Assets include tangible personal property & off-the-shelf software
o Some real property improvements allowed if elected, but only if used in a
business, no rental assets, qualified restaurant property was included
o Deduction limited to taxable income each year
14
15. Sec 179 Expensing & Bonus Depreciation
Cost Recovery – Section 179 (continued)
New Law – Beginning after 2017
o Maximum expense amount increased to $1,000,000
o Phase out threshold increased to $2,500,000
o Includes qualified real property (if elected):
Qualified improvement property (covers interior improvements to existing
buildings)
Certain exterior improvements to existing buildings including roofs, HVAC, fire
protection, alarm & security systems
No more qualified restaurant property
One advantage of Sec 179 over bonus depreciation – most states allow Sec 179 but not
bonus depreciation
15
16. Sec 179 Expensing & Bonus Depreciation
Cost Recovery – Section 179 (continued)
16
Tax Years Max Deduction allowable Deduction phaseout begins at
2017 $510,000 $2,030,000
2018 $1,000,000 $2,500,000
2019 & later $1,000,000 + inflation adj. $2,500,000 + inflation adj.
17. Sec 179 Expensing & Bonus Depreciation
Cost Recovery – Real property changes
Old Law –
o Non-residential real property depreciated over 15-39 years
o Default life was 39 years, no bonus, no Sec 179, exceptions:
Qualified restaurant or retail property – 15 years, eligible for Sec 179
Qualified leasehold improvement property - 15 years, eligible for Sec
179
Qualified improvement property – 15 or 39 years w/ bonus
17
18. Sec 179 Expensing & Bonus Depreciation
Cost Recovery – Real property changes (continued)
New Law – Property placed in service after 2017
o Qualified restaurant/retail and qualified leasehold improvement property
definitions have been eliminated
o Qualified improvement property remains
15 year life
Eligible for Sec 179 if elected and bonus depreciation
Technical correction needed and is expected
o Non-residential real property not meeting definition of qualified
improvement property has a 39-year life
18
20. Interest Deduction Limitations
Interest Expense limited to 30% of taxable income
Old Law –
o Interest paid by a business is generally deductible in calculating taxable
income
New Law – Beginning after 2017
o Deduction for business interest expense is limited to the sum of:
Business interest income +
30% of the adjusted taxable income +
Floor plan financing interest for dealerships
o Disallowed interest is carried forward indefinitely
20
21. Interest Deduction Limitations
Interest Expense limited to 30% of taxable income (continued)
New Law - (continued)
o Business interest defined as interest paid or accrued on indebtedness
properly allocable to a trade or business. It does not include investment
interest.
o Adjusted taxable income is defined as taxable income computed without
regard to:
Any item of income, gain, deduction, or loss which is not properly allocable to a
trade or business
Any business interest or business interest income
Net operating losses
For 2018-2021 only – depreciation, amortization, or depletion (eases the transition)
21
22. Interest Deduction Limitations
Interest Expense limited to 30% of taxable income (continued)
New Law - (continued)
o This rule not applicable to taxpayers with average annual gross receipts
of $25 million or less for the three-year period ending with the prior
taxable year
o Also does not apply to rental property activity if not considered a trade
or business. If rental is a trade or business, then taxpayer can elect out
of the interest rules in exchange for different (slower) depreciation rules
for the rental property.
o Previously mentioned floor plan financing exception
22
24. Expansion of the Cash Method of Accounting
Cash method can be used up to $25 million revenue
Old Law –
o Cash method only allowed for tax purposes if either:
Revenue less than $1 million with inventory, or
Revenue less than $5 million without inventory
New Law – Beginning after 2017
o Cash method allowed for any company with average gross receipts of less
than $25 million, calculated over 3-year period before the tax year
o Can simplify bookkeeping for smaller restaurants/retail and hotels
o Track inventory for mgmt decisions but immediately expense for tax
24
26. Bonus Info
Business Entertainment Expenses Disallowed
26
Old Law –
o 50% deduction for business-related meals & entertainment
o Meals provided on premises for convenience of employer are 100%
deductible and excluded from employee’s income (no W-2 reporting)
New Law – Beginning after 2017
o No deduction for entertainment
o Meals provided on premises for convenience of employer are 50%
deductible but still excluded from employee’s income (no W-2 reporting)
This deduction also scheduled to be eliminated but only after 2025
27. Bonus Info
Net Operating Losses
Net Operating Losses – For 2018 – 2025 the deduction allowed is now
equal to the lesser of:
o (1) the aggregate of the net operating loss carryovers to such year,
plus the net operating loss carrybacks to such year, or
o (2) 80 percent of the taxable income computed without regard to the
NOL.
NOLs can now only be carried forward to future tax years.
o The amount of the carryover is limited to a maximum of 80 percent of the taxable
income computed without regard to the NOL.
27
28. Bonus Info
Like-kind exchanges
Prior Law –
o No gain or loss recognized if property is exchanged for property of a like-
kind
Both old and new properties must be held for productive use in a
trade or business or for investment
Applied to both tangible personal property (such as vehicles &
equipment) and real property
New Law – Beginning after 2017
o Non-recognition of gain for a like-kind exchange is limited to real
property only
28
29. Bonus Info
Estate, Gift, and Generation-Skipping Transfer Taxes
Estate and Gift Taxes – Beginning in 2018, the exemption for estate
and gift taxes is increased to $10,000,000 (and adjusted forward for
inflation from 2011).
o Inflation - There will be a roughly $11,000,000 estate and gift exemption starting in 2018.
Generation-Skipping Transfer Tax – Beginning in 2018, the amount of
the generation-skipping transfer tax exemption is increased to
$10,000,000 (and adjusted forward for inflation from 2011).
o Inflation - There will be a roughly $11,000,000 generation-skipping transfer tax exemption starting in 2018.
These increases are set to expire on December 31, 2025, and the exemption amounts
will return to the pre-tax reform amounts.
o This makes the current planning techniques still relevant, even for estates that do not
exceed the increased exemption amount.
29
31. Individual Tax Changes
Ordinary Income Tax Rates 2017 Tax Year
The current seven tax bracket system is retained, but the rates are lowered for all taxpayers. Below are the
current rates for 2017.
31
Tax
Rate
Married Filing
Jointly and Surviving
Spouse
Single
Head of
Household
Married Filing
Separately
Estates & Trusts
10% $0-$18,650 $0-9,325 $0-$13,350 $0-$9,325 N/A
15%
$18,650-$75,900 $9,325-$37,950 $13,350-50,800 $9,325-$37,950 $0-$2,550
25% $75,900-153,100 $37,950-$91,900 $50,800-$131,200 $37,950-$76,550 $2,550-$6,000
28%
$153,100-233,350 $91,900-$191,650 $131,200-$212,500 $76,550-$116,675 $6,000-$9,150
33%
$233,350-416,700 $191,650-$416,700 $212,500-$416,700 $116,675-$208,350 $9,150-$12,500
35% $416,700-$470,700 $416,700-$418,400 $416,700-$444,550 $208,350-$235,350 N/A
39.6%
Over $470,700 Over $418,400 Over $444,550 Over $235,350 Over $12,500
32. Individual Tax Changes
Ordinary Income Tax Rates 2018 Tax Year (inflation adj. through 2025)
The current seven tax bracket system is retained, but the rates are lowered for all taxpayers and the
thresholds are adjusted below. These rates and other changes are effective 2018 through 2025.
32
Tax
Rate
Married Filing
Jointly and Surviving
Spouse
Single
Head of
Household
Married Filing
Separately
Estates & Trusts
10% $0-$19,050 $0-9,525 $0-$13,600 $0-$9,525 $0-$2,550
12%
$19,050-77,400 $9,525-38,700 $13,600-51,800 $9,525-38,700 N/A
22% $77,400-165,000 $38,700-82,500 $51,800-82,500 $38,700-82,500 N/A
24%
$165,000-315,000 $82,500-157,500 $82,500-157,500 $82,500-157,500 $2,550-9,150
32%
$315,000-400,000 $157,500-200,000 $157,500-200,000 $157,500-200,000 N/A
35% $400,000-600,000 $200,000-500,000 $200,000-500,000 $200,000-300,000 $9,150-$12,500
37%
Over $600,000 Over $500,000 Over $500,000 Over $300,000 Over $12,500
33. Individual Tax Changes
Kiddie Tax
Children that are subject to the “Kiddie Tax” will have two different tax regimes for their
earned and unearned income:
o Earned Income: Taxed at the rates applied to single filers.
o Unearned Income: Taxed at ordinary income and preferential rates
applied to trusts and estates.
Children will no longer be subject to their parents’ tax rate.
Ages for application of kiddie tax are unchanged
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34. Individual Tax Changes
Above-the-Line Deductions
Moving Expenses – Suspended through tax year 2025; however, still
available for members of the U.S. military who move pursuant to a
military order.
Alimony – Effective for divorce or separation agreements entered
into after December 31, 2018*:
o Deduction - The deduction for alimony or separate maintenance payments is
repealed.
o Inclusion - The inclusion of income by the recipient is repealed.
Existing alimony or separate maintenance agreements are grandfathered, as
are modifications to existing agreements.
o *Please note the 1-year delay on the implementation of this provision
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35. Individual Tax Changes
Standard Deduction & Personal Exemptions
The standard deduction is increased to the following amounts:
o Married Filing Jointly: $24,000 (up from $12,700)
o Head-of-Household: $18,000 (up from $9,350)
o All Other Taxpayers: $12,000 (up from $6,350)
The deduction is indexed for inflation in future years, 2018-2025
The personal exemption is suspended through tax year 2025.
o The personal exemption for estates and trusts remains at $100
(complex), $300 (simple), $600 (estates).
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36. Individual Tax Changes
Itemized Deductions
Medical Expenses – The AGI threshold is lowered from 10% to 7.5% for
all taxpayers for tax years 2017 and 2018.
State and Local Taxes – Taxpayers are permitted a maximum $10,000
deduction (2018 – 2025) on the sum of:
o (i) state and local real property taxes,
o (ii) state and local personal property taxes, and
o (iii) state and local income taxes (or sales tax, if elected).
This limitation does not apply to real property taxes and personal property taxes
paid or accrued in carrying on a trade or business.
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37. Individual Tax Changes
Itemized Deductions (Continued)
Mortgage Interest – Taxpayers are permitted to deduct the interest
paid on acquisition indebtedness of up to $750,000.
o Debt incurred on or before December 15, 2017, is grandfathered
under the previous law of interest paid on acquisition
indebtedness of up to $1,000,000.
Home Equity Interest – The deduction for interest paid on home
equity indebtedness is suspended. No grandfather provision for
home equity interest.
Both effective 2018-2025
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38. Individual Tax Changes
Itemized Deductions (Continued)
Charitable Contributions – Three modifications for years 2018-2025:
o (1) Cash contributions to public charities now have a 60 percent of
AGI limitation (previously it was 50 percent).
o (2) Denial of charitable deduction for payments made in exchange for
athletic seating rights (previously able to deduct 80 percent of
amounts paid).
o (3) Removal of substantiation exception for certain contributions
reported by the charitable organization.
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39. Individual Tax Changes
Itemized Deductions (Continued)
Casualty Losses – Suspended through tax year 2025, unless the loss is
attributable to a Federally declared disaster loss.
o If a taxpayer has a personal casualty loss gain, they may deduct
personal casualty losses not attributable to a Federal declared
disaster loss in the amount equal to no more than the personal
casualty loss gain.
Wagering Transactions - In addition to the limitation on gambling losses,
expenses incurred in carrying on any wagering transaction are also
limited to the extent of gambling winnings.
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40. Individual Tax Changes
Itemized Deductions (Continued)
Miscellaneous Itemized Deductions Subject to 2-percent floor -
These have been suspended through 2025 and include:
investment fees and expenses
tax preparation fees
unreimbursed business expenses
“Pease” Limitation – Repeals the overall limitation on itemized
deductions through 2025.
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41. Individual Tax Changes
Alternative Minimum Tax (AMT)
The individual AMT has been retained.
o The exemption amounts have been increased to the following
thresholds:
• Joint Filers: $109,400 ($54,700 for MFS)
• All other Filers: $70,300
o The exemption phase-out thresholds are increased to:
• Joint Filers: $1,000,000
• All other Filers: $500,000
• Trusts and Estates – Remains unchanged.
o Many of the tax preference items that are AMT addbacks have been suspended.
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42. Individual Tax Changes
Business Losses
Businesses Losses – For 2018-2025 business losses are only permitted in the current year to
the extent that they do not exceed the sum of:
o (i) Taxpayer’s gross income and
o (ii) $500,000 for joint filers or $250,000 for other taxpayers
Excess businesses losses will be disallowed and added to the taxpayer’s net operating
loss (NOL) carryforward.
o Carryforwards are limited to the lesser of:
• (i) the carryforward amount or
• (ii) 80-percent of taxable income determined without regard to the NOL
deduction.
For pass-through entities, this is applied at the partner/shareholder level.
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43. Individual Tax Changes
Miscellaneous Provisions
Inflation Adjustments – Inflation will be now measured using the Chained Consumer Price
Index (C-CPI). This method is a generally slower inflationary adjustment than the current
Consumer Price Index (CPI).
o This provision is permanent.
Child Tax Credit – For 2018 – 2025 Increased to $2,000 per qualifying child, with up to
$1,400 being refundable. Also, there is a new $500 non-child dependent credit.
o Qualifying Child is defined as a dependent who is under the age of 17 at the end of
the tax year.
Credit starts to phase-out for joint filers at AGI of $400,000 and for other
filers at AGI of $200,000.
Sec 529 Savings Plans – For distributions after Dec. 31, 2017, “qualified higher
education expenses” include tuition at an elementary or secondary public, private, or
religious school, up to a $10,000 limit per tax year.
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45. Planning & Strategies
Individuals
Increased Standard Deduction
o Bunching Strategies to maximize itemized deductions
Defer/Accelerate Income - examples
o Large gain on sale of stock/mutual funds could cause you to lose medical deductions
since it raises the 7.5% of AGI amount
o Plan for best year to receive W-2 bonus payments from employer if possible
o Other phase outs based on income such as child tax credits, new pass-through deduction
Defer/Accelerate Itemized Deductions - examples
o Plan elective medical procedures to bunch with other medical expenses to exceed the
7.5% of AGI amount
o Plan your charitable giving to make sure you can itemize at least every other year
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46. Planning & Strategies
Individuals
Increased Standard Deduction
o Case Study – Married taxpayers with:
2018
o $150,000 income
o $10,000 mortgage interest
o $8,000 state & local tax
o $5,000 charity
2019
o $160,000 income
o $9,500 mortgage interest
o $8,500 state & local tax
o $5,000 charity
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No bunching Bunching
Charity
Year 2018 2019 2018 2019
Income 150,000 160,000 150,000 160,000
Deductions (24,000) (24,000) (24,000) (28,000)
Taxable
income
126,000 136,000 126,000 132,000
47. Planning & Strategies
Businesses
Depreciation
o Cost Segregation Study to re-characterize components of real property
from long to short life
o Take advantage of new bonus depreciation and Sec 179 rules
o Be careful with interplay between this strategy and new deductible
interest limits after 2021. More depreciation expense results in lower
taxable income which limits interest.
o Also remember new excess business loss and NOL rules – might limit
current year benefit of big deductions
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Under pre-Act law, qualified leasehold improvement property was an interior building improvement to nonresidential real property, by a landlord, tenant or subtenant, that was placed in service more than three years after the building is and that meets other requirements.
Qualified restaurant property was either (a) a building improvement in a building in which more than 50% of the building's square footage was devoted to the preparation of, and seating for, on-premises consumption of prepared meals (the
more-than-50% test), or (b) a building that passed the more-than-50% test. Qualified retail improvement property was an interior improvement to retail space that was placed in service more than three years after the date the building was first placed in service and that meets other requirements.
Qualified improvement property is any improvement to an interior portion of a building that is nonresidential real property if such improvement is placed in service after the date such building was first placed in service. Qualified improvement property does not include any improvement for which the expenditure is attributable to the enlargement of the building, any elevator or escalator, or the internal structural framework of the building.
Under pre-Act law, qualified leasehold improvement property was an interior building improvement to nonresidential real property, by a landlord, tenant or subtenant, that was placed in service more than three years after the building is and that meets other requirements.
Qualified restaurant property was either (a) a building improvement in a building in which more than 50% of the building's square footage was devoted to the preparation of, and seating for, on-premises consumption of prepared meals (the
more-than-50% test), or (b) a building that passed the more-than-50% test. Qualified retail improvement property was an interior improvement to retail space that was placed in service more than three years after the date the building was first placed in service and that meets other requirements.
Qualified improvement property is any improvement to an interior portion of a building that is nonresidential real property if such improvement is placed in service after the date such building was first placed in service. Qualified improvement property does not include any improvement for which the expenditure is attributable to the enlargement of the building, any elevator or escalator, or the internal structural framework of the building.