Must-Know Info on How Charitable Deductions Work

You need to itemize in order to claim your charitable deduction The latest tax act raised the standard deduction single filers to $12,200 and joint filers to $24,400. It appears the big increase in standard deduction has had a negative impact on the percentage of taxpayers who make charitable contributions because you are unable to deduct the contributions if you decide to go with the standard deduction rather than opting for itemization. Determining whether to itemize or not depends on your specific situation so you will need to consult an experienced and knowledgeable tax advisor. As a general rule, the interest on your mortgage is a factor in determining whether you should itemize as this is a write-off that you can take advantage of only if you itemize. The new tax law also limited the interest deduction to loans up to $750,000 for homes purchased after December 15, 2017. If you...

17 September

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Which Small Businesses Get the 20 Percent Deduction?

Posted by Bobby Feisee

in Bobby's Blog

When tax reform legislation was signed into law, a 20 percent deduction for owners of a variety of pass-through businesses, including limited liability companies, partnerships, so-called S corporations and sole proprietorships was created. The deduction effectively lowers a small business owner's top rate to 29.6 percent from 37 percent. However, when the legislation passed, there was ambiguity as to which "small businesses" would qualify for the preferential tax treatment. Well, the Treasury Department recently issued guidance that helps bring some clarity to this issue. Those Who Qualify for the 20 Percent Deduction The deduction can be claimed by business owners whose taxable income is $315,000 or less if you file your taxes jointly, according to a fantastic article published in the Wall Street Journal. This means owners of partnerships, S corporations, limited-liability companies (LLCs) and sole proprietorships with taxable income of $315,000 or less can get the 20 percent deduction for joint filers....

12 November

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Estate Tax May Survive Federal Tax Reform

Posted by Bobby Feisee

in Bobby's Blog

Congress is in the midst of debating tax reform which features an attempt to possibly repeal the federal estate tax (also referred to as the "death tax"). This tax typically effects high value estates that can result in a whopping 40 percent estate tax. In fact, the 40 percent estate tax affects approximately 0.2 percent of estates in America. That translates to 5,460 estates in 2017, according to the nonpartisan Tax Policy Institute. Though, there are sizable exemptions to the estate tax under current law. For example, in 2017, the estate tax exemption is $5.49 million per individual. This means an individual can leave $5.49 million to their heirs and pay no federal estate or gift tax, according to Forbes. There has been long-held criticism behind the premise of the federal estate tax, especially in conservative circles. They point out that the estate tax is essentially a double-tax on hard-earned income and harms...