Berdon Blogs

TAX TALK: TCJA Temporarily Lowers Medical Expense Deduction Threshold

Posted by Michael Eagan, J.D., LL.M. on Feb 12, 2018 9:14:00 AM

With rising health care costs, claiming whatever tax breaks related to health care that you can is more important than ever. But there’s a threshold for deducting medical expenses that may be hard to meet. Fortunately, the Tax Cuts and Jobs Act (TCJA) has temporarily reduced the threshold.

Eligible Expenses

Medical expenses may be deductible if they’re “qualified.” Qualified medical expenses involve the costs of diagnosis, cure, mitigation, treatment, or prevention of disease, and the costs for treatments affecting any part or function of the body. Examples include payments to physicians, dentists and other medical practitioners, as well as equipment, supplies, diagnostic devices, and prescription drugs.

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Topics: TAX TALK

TAX TALK: Two Small Business Tax Credits May Reduce Your 2017 and 2018 Tax Bills

Posted by Michael Eagan, J.D., LL.M. on Feb 5, 2018 11:44:00 AM

Tax credits reduce tax liability dollar-for-dollar, potentially making them more valuable than deductions, which reduce only the amount of income subject to tax. Maximizing available credits is especially important now that the Tax Cuts and Jobs Act has reduced or eliminated some tax breaks for businesses. Two still-available tax credits are especially for small businesses that provide certain employee benefits.

1. Credit for Paying Health Care Coverage Premiums

The Affordable Care Act (ACA) offers a credit to certain small employers that provide employees with health coverage. Despite various congressional attempts to repeal the ACA in 2017, nearly all of its provisions remain intact, including this potentially valuable tax credit.

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Topics: TAX TALK

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

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

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

TAX TALK: TCJA Temporarily Expands Bonus Depreciation

Posted by Michael Eagan, J.D., LL.M. on Jan 8, 2018 7:00:00 AM

The Tax Cuts and Jobs Act (TCJA) enhances some tax breaks for businesses while reducing or eliminating others. One break it enhances — temporarily — is bonus depreciation. While most TCJA provisions go into effect for the 2018 tax year, you might be able to benefit from the bonus depreciation enhancements when you file your 2017 tax return.

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Topics: TAX TALK

TAX TALK: Tax Cuts and Jobs Act - Key Provisions Impacting Individuals

Posted by Michael Eagan, J.D., LL.M. on Jan 2, 2018 10:43:09 AM

On December 20, 2017 Congress completed passage of the largest federal tax reform law in more than 30 years. Commonly called the “Tax Cuts and Jobs Act” (TCJA), the new law means substantial changes for individual taxpayers.

The following is a brief overview of some of the most significant provisions. Except where noted, these changes are effective for tax years beginning after December 31, 2017, and before January 1, 2026.

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Topics: TAX TALK

TAX TALK: What You Need to Know about 2017 Year-End Charitable Giving

Posted by Michael Eagan, J.D., LL.M. on Dec 18, 2017 9:18:00 AM

Here are some important considerations to keep in mind this year to ensure you receive the tax benefits you desire.

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Topics: TAX TALK

TAX TALK: First Quarter 2018 Deadlines for Businesses and Other Employers

Posted by Michael Eagan, J.D., LL.M. on Dec 11, 2017 9:18:00 AM

Here are some of the key tax-related deadlines affecting businesses and other employers during the first 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.

January 31

  • File 2017 Forms W-2, “Wage and Tax Statement,” with the Social Security Administration and provide copies to your employees.
  • Provide copies of 2017 Forms 1099-MISC, “Miscellaneous Income,” to recipients of income from your business where required.
  • File 2017 Forms 1099-MISC reporting nonemployee compensation payments in Box 7 with the IRS.
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Topics: TAX TALK

TAX TALK: Higher-Bracket Taxpayers can Take Advantage of 0% Long-Term Gains Rate

Posted by Michael Eagan, J.D., LL.M. on Dec 4, 2017 9:18:00 AM

We’re in the giving season, and if making financial gifts to your loved ones is part of your plans — or if you’d simply like to reduce your capital gains tax — consider giving appreciated stock instead of cash this year. Doing so might allow you to eliminate all federal tax liability on the appreciation, or at least significantly reduce it.

Leveraging Lower Rates

Investors generally are subject to a 15% tax rate on their long-term capital gains (20% if they’re in the top ordinary income tax bracket of 39.6%). But the long-term capital gains rate is 0% for gain that would be taxed at 10% or 15% based on the taxpayer’s ordinary-income rate.

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Topics: TAX TALK

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