Year end tax advice

Because of the new tax law, consider the following

1) Since the state and local tax deductions are capped at $ 10,000 beginning in 2018, consider paying such in December 2017 if you can so that you may still receive some benefit for them in 2017.

2) Since the standard deduction is nearly doubling going forward, more people will NOT be itemizing in 2018. Consider making charitable contributions in 2017 instead of 2018. If you have clothing and / or furniture you can donate, do such in 2017 (and make a list for documentation)

3) In connection with number two, more people should consider bunching their deductions. For example, make charitable contributions every other year. Donate in 2017 and 2019 and 2021, but not in 2018 or 2020. This will help people exceed the standard deduction in odd years. You can also make sure your January 2018 mortgage payments posts in December 2017 and then your January 2019 payment posts in 2019 and your January 2020 payment posts in 2019. This strategy is less important if you can still itemize every year.

This is not intended to be all inclusive, every situation is different, and there are other variables like AMT that MAY come into play

Pay real estate taxes early as well.

Look into deeper funding your retirements

Small business owner or sole prop, look at investing in your company also(I.e., new computer, vehicle, desk, etc)

?

Willie99 said:

Because of the new tax law, consider the following

1) Since the state and local tax deductions are capped at $ 10,000 beginning in 2018, consider paying such in December 2017 if you can so that you may still receive some benefit for them in 2017.

2) Since the standard deduction is nearly doubling going forward, more people will NOT be itemizing in 2018. Consider making charitable contributions in 2017 instead of 2018. If you have clothing and / or furniture you can donate, do such in 2017 (and make a list for documentation)

3) In connection with number two, more people should consider bunching their deductions. For example, make charitable contributions every other year. Donate in 2017 and 2019 and 2021, but not in 2018 or 2020. This will help people exceed the standard deduction in odd years. You can also make sure your January 2018 mortgage payments posts in December 2017 and then your January 2019 payment posts in 2019 and your January 2020 payment posts in 2019. This strategy is less important if you can still itemize every year.

This is not intended to be all inclusive, every situation is different, and there are other variables like AMT that MAY come into play

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Don't you think #3 is still beneficial even if you think you can still itemize every year as long as your total itemized aren't much more than the standard deduction?

Jstack34 said:

Don't you think #3 is still beneficial even if you think you can still itemize every year as long as your total itemized aren't much more than the standard deduction?

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Of course I do, hence I used the expression "less important". It's not plausible to address all the variables in a generic letter, I'm only trying to get people thinking about the process and how they may benefit the most.

Everyone should address questions about their own situation to their tax professional

Generally speaking, is it better for tax purposes to make donations in my Scorp name or personal?

Defying said:

Generally speaking, is it better for tax purposes to make donations in my Scorp name or personal?

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I don't think it matters. I believe the charitable contribution flows directly to Schedule A in either event so there is no difference. I'm not an expert on S Corps though

Defying said:

Generally speaking, is it better for tax purposes to make donations in my Scorp name or personal?

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yeah, no difference really

razorbackpicks said:

Pay real estate taxes early as well.

Look into deeper funding your retirements

Small business owner or sole prop, look at investing in your company also(I.e., new computer, vehicle, desk, etc)

Click to expand...

Told my wife to order two laptops and plenty of office stuff

Just a few days left

good advice here! thx.

prepaying next year's tithes already as I won't meet the $24K deduction next year.

Does this new tax regime definitely go into effect in 2018 or could it be pushed back a year?

Betallsports said:

Told my wife to order two laptops and plenty of office stuff

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<header> [h=1]Does the 2017 Tax Reform Bill Eliminate Small Business Deductions?[/h] [h=2]Contrary to rumor, the tax bill does not eliminate deductions for small business expenses, though it would axe those for unreimbursed employee business expenses.[/h]
</header>

[h=3]CLAIM[/h] Under the 2017 tax overhaul legislation currently making its way through Congress, all deductions for business-related expenses incurred by small business owners and the self-employed would be eliminated.
[h=3]RATING[/h] FALSE
[h=3]ORIGIN[/h] A misunderstood provision of the 2017 tax overhaul legislation making its way through Congress has panicked small business owners and independent contractors who fear their deductions for business expenses are on the block.
A viral Facebook post in late November claimed that the Tax Cuts and Jobs Act would “destroy many small businesses” by eliminating those deductions:
The post went on to advise those potentially affected to make as many business purchases as possible before 31 December 2017. Small business owners may want to conduct their own research before taking that advice, however, because there does not appear to be any such provision in either the House or Senate version of the bill.
Whence the confusion? A provision in both versions of the bill calling for the suspension of itemized deductions for unreimbursed business expenses incurred by employees was apparently mistaken as being applicable to small business owners and the self-employed. Said provision read as follows in an early version of the bill eventually passed by the Senate:
Specific references to employee expense deductions were removed from final version of the Senate bill, but the following language pertaining to all itemized deductions subject to the two percent floor (which includes employees’ work-related expenses) remained:
Although this proposal (which would take effect beginning with the 2018 tax year) would dramatically affect employees who incur unreimbursed expenses related to their job (such as home office expenses, union dues, work-related education, job searches, legal fees, subscriptions to trade journals, etc.), it does not affect small business owners or self-employed persons, who would still be able to declare business expenses on IRS Form 1040, Schedule C (Profit or Loss from Business).
An analysis by The Motley Fool’s Dan Caplinger notes that small business owners will generally see “some favorable impact” from the bill, although the biggest tax breaks are aimed at benefiting large corporations.

So it's false ??

Don't need to buy a bunch of office stuff for my wife's businesses

betallsports said:

<header> does the 2017 tax reform bill eliminate small business deductions?

contrary to rumor, the tax bill does not eliminate deductions for small business expenses, though it would axe those for unreimbursed employee business expenses.


</header>

claim

under the 2017 tax overhaul legislation currently making its way through congress, all deductions for business-related expenses incurred by small business owners and the self-employed would be eliminated.
rating

false
origin

a misunderstood provision of the 2017 tax overhaul legislation making its way through congress has panicked small business owners and independent contractors who fear their deductions for business expenses are on the block.
A viral facebook post in late november claimed that the tax cuts and jobs act would “destroy many small businesses” by eliminating those deductions:

as someone who has been helping prepare income tax returns for individual business persons since 1994, i just want to mention a few key points for anyone out there who may be uninformed about the new tax reform that has passed the house. This is not a political post, just information. Under the new plan, the tax burden will shift more heavily to the middle class, particularly the individual business owner. How? All business expenses are, in effect, removed. No longer will items such as business cards, advertising, continuing education, travel expenses, business-related mileage, business phone, subscription services, accounting software, home office, tools, uniforms, and office supplies be deductible….
​

the post went on to advise those potentially affected to make as many business purchases as possible before 31 december 2017. Small business owners may want to conduct their own research before taking that advice, however, because there does not appear to be any such provision in either the house or senate version of the bill.
Whence the confusion? A provision in both versions of the bill calling for the suspension of itemized deductions for unreimbursed business expenses incurred by employees was apparently mistaken as being applicable to small business owners and the self-employed. Said provision read as follows in an early version of the bill eventually passed by the senate:

unreimbursed expenses attributable to the trade or business of being an employee
in general, unreimbursed business expenses incurred by an employee are deductible, but only as an itemized deduction and only to the extent the expenses exceed two percent of adjusted gross income.
Present law and irs guidance provide examples of items that may be deducted under this provision….
description of proposal
the proposal repeals all miscellaneous itemized deductions that are subject to the two percent floor under present law.
​

specific references to employee expense deductions were removed from final version of the senate bill, but the following language pertaining to all itemized deductions subject to the two percent floor (which includes employees’ work-related expenses) remained:

suspension for taxable years 2018 through 2025.
—notwithstanding subsection (a), no miscellaneous itemized deduction shall be allowed for any taxable year beginning after december 31, 2017, and before 19 january 1, 2026.’
​

although this proposal (which would take effect beginning with the 2018 tax year) would dramatically affect employees who incur unreimbursed expenses related to their job (such as home office expenses, union dues, work-related education, job searches, legal fees, subscriptions to trade journals, etc.), it does not affect small business owners or self-employed persons, who would still be able to declare business expenses on irs form 1040, schedule c (profit or loss from business).
An analysis by the motley fool’s dan caplinger notes that small business owners will generally see “some favorable impact” from the bill, although the biggest tax breaks are aimed at benefiting large corporations.

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that was on facebook about a month ago. That guy is totally off and do not listen to him!!!

Btw, we are unable to prepay our R/E taxes in the state of florida

Betallsports said:

So it's false ??

Don't need to buy a bunch of office stuff for my wife's businesses

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Depends how you are setup. If you are purchasing the the laptops under the business name then no, it won't change from this year to next from my understanding. They arent changing the ability to deduct "cost of doing business" which is what you purchasing a laptop under the business name (business check, cc, etc) is doing. You are still reducing your profit amount and that is not changing, what is changing is ones that would be deducting it on the personal side of the return, after the profits hit the personal return. I hope this makes sense. I am not a practicing CPA however.

Also, the IRS slammed shut the loop hole many of us were trying to exploit. Many states and counties don't bill real estate taxes until after it becomes 2018 and they came out this week and said prepaying is not allowed to be deducted on 18. Bummer! Ok, so time to pre buy some chit! Loaded up on some ink and toner today. Now looking at other things.

razorbackpicks said:

Depends how you are setup. If you are purchasing the the laptops under the business name then no, it won't change from this year to next from my understanding. They arent changing the ability to deduct "cost of doing business" which is what you purchasing a laptop under the business name (business check, cc, etc) is doing. You are still reducing your profit amount and that is not changing, what is changing is ones that would be deducting it on the personal side of the return, after the profits hit the personal return. I hope this makes sense. I am not a practicing CPA however.

Also, the IRS slammed shut the loop hole many of us were trying to exploit. Many states and counties don't bill real estate taxes until after it becomes 2018 and they came out this week and said prepaying is not allowed to be deducted on 18. Bummer! Ok, so time to pre buy some chit! Loaded up on some ink and toner today. Now looking at other things.

Click to expand...

Ok, I'm better understanding this now.

My wife has two businesses, one a C corp and the other an S corp ( files as a S corp ) ?? not 100% sure
my understanding is the S corp is done through her personal Taxes. The C crop is what has all the company name, etc

So I believe if she's going to buy a new Laptop , it should be personal under the S crop.

Betallsports said:

So it's false ??

Don't need to buy a bunch of office stuff for my wife's businesses

Click to expand...

business expenses incurred by an actual business are still deductible and should always be deductible

as already mentioned, employee business expenses have been eliminated. So employees who have been deducting stuff like office in home expenses or unreimbursed automobile / travel/ entertainment expenses will no longer be able to do so.

in your wife's case, any expense incurred by her S-Corporation will be fully deductible by the S-corporation. I think you understand how to handle this stuff

Betallsports said:

Ok, I'm better understanding this now.

My wife has two businesses, one a C corp and the other an S corp ( files as a S corp ) ?? not 100% sure
my understanding is the S corp is done through her personal Taxes. The C crop is what has all the company name, etc

So I believe if she's going to buy a new Laptop , it should be personal under the S crop.

Click to expand...

Just keep buying stuff under the s corp and you are reducing your s corp profits by doing so

it kinda sounds as though you dont lose anything as long as you file correctly. my wife has an LLC, her and her business partner deduct things from the business side before any money reaches the personal. seems like that will remain unchanged if im not mistaken. seems like people who will be screwed are the people that dont know how to properly file their business expenses and have their finances in a mess. please let me know if i understand this wrong, we are meeting our accountant in january and would like to make sure i ask all the right questions