Category: Tax Planning
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All taxes are political: Where we stand today with tax reform fallout
Here’s an update in bullet point format: Strong public opposition – It is clear from multiple sources now that the majority of Americans are opposed to the new tax law on the basis that it borrows from our future through massive deficit spending immediately. When the temporary tax cut expires our taxes are expected to…
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Tax Simplification
We have read about tax simplification and post card tax returns for many months, but that is not the reality with the new tax law known as the Tax Cut and Jobs Act. Our federal income tax law and income tax calculation process is more complicated than ever before. The new tax law keeps almost…
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What the new tax law means to me
As we pick apart the new federal tax bill that is about to become law, this post summarizes the most significant portions that affect my own federal income tax return. The post is published incomplete and will be updated as more information becomes clear. But apparently the law will increase my taxes by about $2,000…
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KPMG tax reform – initial observations
The latest tax reform analysis boiled down to a neat 165 page summary: https://home.kpmg.com/content/dam/kpmg/us/pdf/2017/12/tnf-conference-agreement-dec18-2017.pdf
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When business expenses are not deductible
A general principle of tax accounting is that we deduct ordinary and necessary business expenses from our gross income before reporting the net taxable income. However, this is not always the case. In some cases it is necessary to modify your tax accounting to comply with specific tax laws – even sometimes when the tax…
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Good for CPAs, Bad for RIAs
As great as this tax bill is for CPAs who offer tax planning services, it is just as bad for investment advisers. Here’s why: RIAs do not benefit from the 20% deduction of pass-through entity income. RIAs tend to have high state, local and property taxes. Limiting this deduction, along with elimination of the personal…
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2018 tax rates for married filing jointly
While most taxpayers get a decrease in marginal tax rates some small group of ‘married filing jointly‘ taxpayers will face higher marginal tax rates. This means that a married taxpayer with taxable income of $237,951 to $315,000 will see slightly less of a tax cut as a percentage of income compared to married taxpayers in other…
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The three basic principles of individual tax reform
The tax reform bill, as passed, does three key things for individual taxpayers: Temporarily changes the way we calculate “taxable income”. No longer do we calculate personal exemptions. Most deductions are eliminated. The standard deduction is increased. To estimate the impact on your taxes subtract the total amount of your current deductions and personal exemptions…
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Higher marginal tax rate for some single filers
While most taxpayers get a decrease in marginal tax rates some single taxpayers will face higher marginal tax rates. This means that a single taxpayer with taxable income of $195,450 will see significantly less of a tax cut than a single with taxable income of $157,500. This does not mean that these taxpayers will necessarily see…
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First five strategies to deal with the new tax law
My action plan for bringing actionable information to clients as soon as the tax bill becomes law. Update December 31, 2017: Major parts of the law become effective tomorrow. I’ve moved past most of the preliminary points in this article and am now focused on the actions that can make the most immediate impact on…