For the purposes of the new Qualified Opportunity Fund, TCJA is not the big bad wolf. In fact, it is a new strategy for tax planning shaped by the tax reform of the Tax Cuts and Jobs Act.
These funds can defer capital gains in the current year, significantly reduce some of them later on, while making capital gains tax-free on the new investment. You will need to strategies to maneuver the new rules and time frames to implement the tax benefits.
Here are two strategies that may help you:
If you need help strategizing please contact us we can help! 262-358-8297
Thanks to the tax reform of the Tax Cuts and Jobs Act, you have some obstacles to overcome for tax years to 2025.
TCJA tax reform changes the kiddie tax rules to tax a portion of an affected child’s or young adult’s unearned income at the federal income tax rates paid by trusts and estates, which can be as high as 37%.
If this applies to you, tax planning will help mitigate this tax.
If Congress doesn't send a bill to the President approving a spending budget by midnight Friday, most federal agencies will be forced to stop operations, again.
It is expected that bipartisan legislation will be first voted on by the Senate today, then the House where a vote is expected on agreement this evening. The bill then goes to the President for signature Friday morning.
It is unknown exactly how a second shutdown would affect the IRS, filing season, tax preparers and taxpayers. We would expect additional refund delays and staff shortages.
Here is why may not work for you!
The tax reform of the Tax Cuts and Jobs Act (TCJA) has introduced an astonishing threshold to larger business losses that can actually attack your cash flow, ouch!
So, this new law apparently works in some bizarre ways, even though you don’t have a real income for the year. Then you really have some planning opportunities to mitigate the problem when you know precisely how this hideous new rule actually does work.
Your Elected Officials have decided to introduce laws over the years that severely limits your opportunities to counter your business or lease losses to other sources of income.
Here are the most common that I have been hearing in all my continuing education workshops:
In other words, this relatively new policy is that in the current year, which the new law considers to be an "excess business loss, "you simply cannot use your business loss. "Instead, the excess business loss will be treated as a net operating loss (NOL) for the next taxable year.
To avoid becoming a victim of this new TCJA new rules you need to implement these two strategies:
While the determination of the applicable rate of capital gains under TCJA is different, with the rate structure linked to taxable income " breakpoints " rather than tax brackets, there is in fact no difference in the effect of these changes. Long term capital gains taxed at zero, 15% or 20%
There is still time to mitigate your 2018 tax liability. Contact us we can help.
According to the Protecting Americans from Tax Hikes (PATH) Act, the IRS cannot issue EITC and ACTC refunds before February 15. The IRS expects the earliest EITC/ACTC related refunds to be available in taxpayer bank accounts or debit cards on February 27, 2019, if these taxpayers chose direct deposit and there are no other issues with their tax return.
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Spencer Accounting Group, LLC does not provide investment, tax, legal, or retirement advice or recommendations in these blogs. The information presented here is not specific to any individual's personal circumstances.
Keana Spencer is an Accountant, Entrepreneur, and Educator to her clients, with a strong passion. Keana has over 10 years of experience and through her practice, she is a source of knowledge and strategies to her clients.