Berdon Blogs

TAX TALK: Can You Deduct Home Office Expenses?

Posted by Michael Eagan, J.D., LL.M. on Jan 29, 2018 9:20:00 AM

Working from home has become commonplace. But just because you have a home office space doesn’t mean you can deduct expenses associated with it. And for 2018, even fewer taxpayers will be eligible for a home office deduction.

Changes under the TCJA

For employees, home office expenses are a miscellaneous itemized deduction. For 2017, this means you’ll enjoy a tax benefit only if these expenses plus your other miscellaneous itemized expenses (such as unreimbursed work-related travel, certain professional fees, and investment expenses) exceed 2% of your adjusted gross income.

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Topics: TAX TALK

T&E TALK: Preserve Your Wealth with Asset Protection Strategies

Posted by Scott T. Ditman, CPA/PFS on Jan 29, 2018 8:27:37 AM

There are many techniques to protect your assets, from giving them to loved ones to placing them in offshore trusts. It’s important to understand that asset protection isn’t about evading legitimate debts, hiding assets, or defrauding creditors. Rather, it’s about preserving your hard-earned wealth in the face of unreasonable creditors’ claims, frivolous lawsuits, or financial predators.

Assess Your Risk

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Topics: T&E TALK

TAX TALK: TCJA and Personal Exemptions, Standard Deductions, and the Child Credit

Posted by Michael Eagan, J.D., LL.M. on Jan 22, 2018 11:40:00 AM

Under the Tax Cuts and Jobs Act (TCJA), individual income tax rates generally go down for 2018 through 2025. But that doesn’t necessarily mean your income tax liability will go down. The TCJA also makes a lot of changes to tax breaks for individuals, reducing or eliminating some while expanding others. The total impact of all of these changes is what will ultimately determine whether you see reduced taxes. One interrelated group of changes affecting many taxpayers are those to personal exemptions, standard deductions and the child credit.

Personal Exemptions

For 2017, taxpayers can claim a personal exemption of $4,050 each for themselves, their spouses, and any dependents. For families with children and/or other dependents, such as elderly parents, these exemptions can really add up.

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Topics: TAX TALK

SALT TALK: NY Tax Department Fights Back – Comprehensive Report Offers Alternatives to Make New Yorkers Whole

Posted by Wayne Berkowitz CPA, J.D., LL.M. on Jan 22, 2018 9:25:00 AM

A lot of things I thought would never happen, have. While some of this might be attributable to a lack of foresight, I’m convinced most of it has to do with the natural process of just getting older. I never wanted to believe that federal tax reform would severely restrict the deductibility of state and local taxes and was waiting for some heroic legislator to swoop in at the last minute and eliminate this provision from the final legislation. But it never happened.

Fortunately, the New York State Tax Department, in its “Preliminary Report of the Federal Tax Cuts and Jobs Act[1]” has proposed some courageous and creative solutions to Governor Cuomo. 

Listening to news radio was the first I heard of the Preliminary Report. And I have to admit, I had a good laugh at the expense of the Tax Department and the Governor. After all, who is going to make a charitable contribution to the State of New York? But after delving into all thirty seven pages, I have to admit that while the three pillars of the proposal push the envelope, this is exactly what is needed to keep New York taxpayers on an even keel with the rest of the nation. 

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Topics: SALT TALK

T&E TALK: How the Tax Cuts and Jobs Act Impacts Estate Planning

Posted by Scott T. Ditman, CPA/PFS on Jan 22, 2018 7:00:00 AM

The Tax Cuts and Jobs Act of 2017 (TCJA) made sweeping revisions to the tax code that altered federal law affecting individuals, businesses and, estates. Focusing specifically on estate tax law, the TCJA doesn’t repeal the federal gift and estate tax. It does, however, temporarily double the combined gift and estate tax exemption and the generation-skipping transfer (GST) tax exemption.

Beginning after December 31, 2017, and before January 1, 2026, the combined gift and estate tax exemption and the generation-skipping transfer (GST) tax exemption amounts double from an inflation-adjusted $5 million to $10 million. For 2018, the exemption amount is $11.2 million ($22.4 million for married couples). Absent further congressional action, the exemptions will revert to their 2017 levels (adjusted for inflation) beginning January 1, 2026. The marginal federal tax rate for all three taxes remains at 40%.

Estate Planning Remains a Necessity

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Topics: T&E TALK

SALT TALK: New York Enacts Incentive for Home Savings (I Think)

Posted by Wayne Berkowitz CPA, J.D., LL.M. on Jan 15, 2018 11:40:00 AM

The music metaphor of the week takes me back to my high school swim team days. For Saturday practice only, our coach would let us bring in a record album of our choosing, which he would play over the public address system while we swam laps. The only catch, and it was a big one, was that if he didn’t like the music, the album would be dropped into the pool and its owner would have to retrieve the soggy vinyl from the deep end. I’ll never forget when the Cars first album was released in 1978 and “All Mixed Up” was blaring over the PA system. Shortly thereafter, one of my teammates was descending to retrieve his record.

So, I couldn’t help being all mixed up on the enactment of New York State’s brand new home savings incentive. You see, apparently the legislation was signed, sealed, and delivered in December of 2017, only to be postponed by another piece of legislation earlier this month requiring that “The Division of Housing and Community Renewal shall issue a report with detailed recommendations and findings to the governor . . .” 

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Topics: SALT TALK

TAX TALK: 401(k) Contribution Limit Increases for 2018; Most Others Remain Stagnant

Posted by Michael Eagan, J.D., LL.M. on Jan 15, 2018 9:20:00 AM

Retirement plan contribution limits are indexed for inflation, but with inflation remaining low, most of the limits remain unchanged for 2018.  One piece of good news for taxpayers who’re already maxing out their contributions is that the 401(k) limit has gone up by $500. The only other limit that has increased from the 2017 level is for contributions to defined contribution plans, which has gone up by $1,000.

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Topics: TAX TALK

T&E TALK: Include Potential Incapacity in Your Estate Planning Strategies

Posted by Scott T. Ditman, CPA/PFS on Jan 15, 2018 7:00:00 AM

Most estate plans focus on what happens after you die. But without arrangements for what will happen in the event you become mentally incapacitated, your plan is incomplete. If an accident, illness, or other circumstances render you unable to make financial or health care decisions — and you don’t have documents in place to specify how these decisions will be made, and by whom — a court-appointed guardian will have to act on your behalf.

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Topics: T&E TALK

SALT TALK: Back to School, Back to Residency Issues

Posted by Wayne Berkowitz CPA, J.D., LL.M. on Jan 8, 2018 11:30:00 AM

We all knew it was going to happen. It’s a little less light when we get up in the morning; the kids will be home from camp soon (very soon, remember when Summer camp was really for the Summer, not just seven weeks or less); and our vacation rentals will be coming to an end. I inevitably start to think of humorous school-related anecdotes to ease the transition. 

One of my favorites is straight out of the Rodney Dangerfield movie, Back to School. Mr. Dangerfield plays a well-seasoned, millionaire businessman who barely graduated high school but returns to college with his son. During his first economics class, Mr. Dangerfield asks the professor to explain exactly what a widget is. The professor annoyingly answers that it just doesn’t matter.  Mr. Dangerfield quickly snaps back, “Tell that to the bank.”

My other favorite anecdote comes from personal experience. During my first year of law school, more than two thirds of the way through our first semester of criminal law, our professor posed a question to one of my fellow students. She had no idea what the answer was, so the professor snapped back that she should try looking in her copy of the New York Penal Code. Without hesitation, she removed the Penal Code from her book bag and proceeded to unwrap it in front of the entire class.

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Topics: SALT TALK

T&E TALK: Appointing the Right Trustee for Your Living Trust Provides Peace of Mind

Posted by Scott T. Ditman, CPA/PFS on Jan 8, 2018 9:21:00 AM

A living trust is a cornerstone of many estate plans. During your life, you can serve as the trustee and manage the assets just as you would if you owned them outright. However, you must choose a trustee to oversee and administer the trust after your death (and during your lifetime, should you become unable to act as trustee).

Trustee Job Description

  • Manage all trust assets, perhaps including securities and business and real estate interests, until they’re distributed;
  • Maintain detailed records and prepare transaction statements;
  • Handle collections, distributions and payments;
  • Ensure all tax returns are prepared and filed; and
  • Settle the trust.

In addition, the trustee must be available to respond to all inquiries from beneficiaries.

Trustee Types to Consider

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Topics: T&E TALK

About Berdon Blogs

Our experts examine the latest trends, economics, business conditions and industry issues to provide timely information you need to maximize your tax advantages and meet your financial goals.

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