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Michael Eagan, J.D., LL.M.

Michael Eagan, J.D., LL.M.

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TAX TALK: Before Selling your Home, Weigh the Tax Consequences

Posted by Michael Eagan, J.D., LL.M. on May 21, 2018 9:20:00 AM

In many parts of the country, summer is peak season for selling a home. If you’re planning to put your home on the market, you’re probably thinking about things like how quickly it will sell and how much you’ll get for it. But don’t neglect to consider the tax consequences.

Home Sale Gain Exclusion

The U.S. House of Representatives’ original version of the Tax Cuts and Jobs Act included a provision tightening the rules for the home sale gain exclusion. Fortunately, that provision didn’t make it into the version that was signed into law.

As a result, if you’re selling your principal residence, there’s still a good chance you’ll be able to exclude up to $250,000 ($500,000 for joint filers) of gain. Gain that qualifies for exclusion also is excluded from the 3.8% net investment income tax.

To qualify for the exclusion, you must meet certain tests. For example, you generally must own and use the home as your principal residence for at least two years during the five-year period preceding the sale. (Gain allocable to a period of “nonqualified” use generally isn’t excludable.) In addition, you can’t use the exclusion more than once every two years.

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Topics: TAX TALK

TAX TALK: Time to Adjust your Withholding?

Posted by Michael Eagan, J.D., LL.M. on May 14, 2018 9:31:16 AM

If you received a large refund after filing your 2017 income tax return, you’re probably enjoying the influx of cash. But a large refund isn’t all positive. It also means you were essentially giving the government an interest-free loan.

That’s why a large refund for the previous tax year would usually indicate that you should consider reducing the amounts you’re having withheld (and/or what estimated tax payments you’re making) for the current year. But 2018 is a little different.

The TCJA and Withholding

To reflect changes under the Tax Cuts and Jobs Act (TCJA) — such as the increase in the standard deduction, suspension of personal exemptions and changes in tax rates and brackets — the IRS updated the withholding tables that indicate how much employers should hold back from their employees’ paychecks, generally reducing the amount withheld.

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TAX TALK: 2018 Tax Planning - Start Now in Light of the TCJA

Posted by Michael Eagan, J.D., LL.M. on May 7, 2018 9:20:00 AM

With the April 17 individual income tax filing deadline behind you (or with your 2017 tax return on the back burner if you filed for an extension), you may not want to think about taxes for the next several months. But for maximum tax savings, now is the time to start tax planning for 2018.  It’s especially critical to get an early start this year because the Tax Cuts and Jobs Act (TCJA) has substantially changed the tax environment.

Many Variables

A tremendous number of variables affect your overall tax liability for the year. Looking at these variables early in the year can give you more opportunities to reduce your 2018 tax bill.

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Topics: TAX TALK

TAX TALK: Tax Document Retention Guidelines for Small Businesses

Posted by Michael Eagan, J.D., LL.M. on Apr 30, 2018 11:10:20 AM

You may have breathed a sigh of relief after filing your 2017 income tax return (or requesting an extension). But if your office is strewn with reams of paper consisting of years’ worth of tax returns, receipts, canceled checks and other financial records (or your computer desktop is filled with a multitude of digital tax-related files), you probably want to get rid of what you can. Follow these retention guidelines as you clean up.

General Rules

Retain records that support items shown on your tax return at least until the statute of limitations runs out — generally three years from the due date of the return or the date you filed, whichever is later. That means you can now potentially throw out records for the 2014 tax year if you filed the return for that year by the regular filing deadline. But some records should be kept longer.

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TAX TALK: Individual Tax Calendar: Important Deadlines for the Remainder of 2018

Posted by Michael Eagan, J.D., LL.M. on Apr 23, 2018 9:30:00 AM

With April 17 behind us, to help you make sure you don’t miss any important 2018 deadlines, here’s a look at when some key tax-related forms, payments, and other actions are due. Keep in mind that this list isn’t all-inclusive, so there may be additional deadlines that apply to you.

Please review the calendar and let us know if you have any questions about the deadlines or would like assistance in meeting them.

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Topics: TAX TALK

TAX TALK: How Long Should You Retain your Tax Records?

Posted by Michael Eagan, J.D., LL.M. on Apr 16, 2018 9:17:00 AM

You should keep your tax records for at least three years from the date you file your tax return. The Internal Revenue Service (IRS) generally has three years to assess additional tax liabilities and you generally have three years to amend a prior tax return. However, since under some circumstances the IRS has up to six years to audit your returns, you should consider keeping your records for six years from the date you filed your tax return.

What to Keep Longer

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Topics: TAX TALK

TAX TALK: There’s Still Time to Make 2017 IRA Contributions

Posted by Michael Eagan, J.D., LL.M. on Apr 9, 2018 9:17:00 AM

Tax-advantaged retirement plans like IRAs allow your money to grow tax-deferred — or, in the case of Roth accounts, tax-free. The deadline for 2017 contributions is April 17, 2018. Deductible contributions will lower your 2017 tax bill, but even nondeductible contributions can be beneficial.

Don’t Lose the Opportunity

The 2017 limit for total contributions to all IRAs generally is $5,500 ($6,500 if you were age 50 or older on December 31, 2017). However, any unused limit can’t be carried forward to make larger contributions in future years.

This means that, once the contribution deadline has passed, the tax-advantaged savings opportunity is lost forever. So to maximize your potential for tax-deferred or tax-free savings, it’s a good idea to use up as much of your annual limit as possible.

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TAX TALK: Key Q2 Tax Calendar Deadlines for Businesses and Other Employers

Posted by Michael Eagan, J.D., LL.M. on Apr 3, 2018 9:20:00 AM

Here are some of the key tax-related deadlines affecting businesses and other employers during the second quarter of 2018. Keep in mind that this list isn’t all-inclusive, so there may be additional deadlines that apply to you. Contact us to ensure you’re meeting all applicable deadlines and to learn more about the filing requirements.

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Topics: TAX TALK

TAX TALK: Home-Related Tax Breaks Valuable for 2017 Returns, Less so for 2018

Posted by Michael Eagan, J.D., LL.M. on Mar 26, 2018 9:48:51 AM

If you own a home, you may be eligible for several valuable breaks on your 2017 tax return.  However, under the Tax Cuts and Jobs Act, your home-related breaks may not be as valuable when you file your 2018 return.

2017 vs. 2018

Here is a look at various home-related tax breaks for 2017 vs. 2018:

Property Tax Deduction. For 2017, property tax is generally fully deductible — unless you’re subject to the alternative minimum tax (AMT). For 2018, your total deduction for all state and local taxes, including both property taxes and either income taxes or sales taxes, is capped at $10,000.

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TAX TALK: Casualty Losses Provide a 2017 Deduction, but Rules Tighten for 2018

Posted by Michael Eagan, J.D., LL.M. on Mar 19, 2018 9:09:45 AM

If you suffered damage to your home or personal property last year, you may be able to deduct these “casualty” losses on your 2017 federal income tax return. For 2018 through 2025, however, the Tax Cuts and Jobs Act suspends this deduction except for losses due to an event officially declared a disaster by the President.

What is a casualty? It’s a sudden, unexpected or unusual event, such as a natural disaster (hurricane, tornado, flood, earthquake, etc.), fire, accident, theft or vandalism. A casualty loss doesn’t include losses from normal wear and tear or progressive deterioration from age or termite damage.

Here are some things you should know about deducting casualty losses on your 2017 return:

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Topics: TAX TALK

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