The recently enacted Tax Cuts and Jobs Act (TCJA) has altered the tax landscape for a lot of individuals and businesses. The changes are extensive and this blog provides a high-level overview of some of the highlights to keep you informed. Due to the sweeping nature of the changes and the need for continued guidance, we’d like the opportunity to have a personalized conversation with you now to discuss planning opportunities for your specific situation. Additional conversations and tax projections are likely necessary to ensure we maximize your tax benefits. Please call our office at your earliest convenience to schedule a meeting.
Under the prior law, individuals who paid alimony to an ex-spouse received a deduction for the alimony paid, while the individuals receiving the alimony treated those payments as income. Tax reform has eliminated the deduction for alimony paid and the recognition of income for alimony received effective for divorce decrees executed after Dec. 31, 2018. We highly recommend that if you are in the midst of divorce proceedings, please have a conversation with us and your divorce attorney to fully understand the financial impacts that this could have.
Please call our office to schedule a planning meeting.
While the TCJA is effective now, there are still many uncertainties. Additional technical guidance and regulations are necessary to provide more clarity on some of the changes. The Internal Revenue Service is working to provide that guidance, which we expect later this year.
We are at your disposal to identify opportunities within the new law that apply to you and help steer you away from new pitfalls and challenges. Please call our office today at 262-358-8297 to set up a tax planning meeting. As always, planning ahead can help you minimize your tax bill and position you for greater success.
Mary Thelma Washington became the first African American Female CPA in the nation, a graduate of Northwestern University she sat for her CPA in Chicago, Illinois. In doing so, she became a visionary, trailblazer and mentor, inspiring other young African-American CPAs and paving the way for generations to come. Her Accounting firm is one of the largest black owned firm in Chicago. Washington, Pittman & McKeever LLC,. You won't find much history of her evolution or the evolution of the firm on her site, however you can pick up the 2002 published book "A White-Collar Profession: African American Certified Public Accountants Since 1921, Theresa A Hammond whom at the time was Boston College Accounting Chairwoman.
Mary T. Washington was born in Vicksburg, Miss as Mary thelma Morrison, her mother died when she was 6 and she moved to Chicago to live with her grandmother. It was said that her father often bragged to others that she could read the entire newspaper. She was always a high achiever especially in math. Her boos after high school at Bina State Bank Arthur J. Wilson (who became the 2nd Black CPA) encouraged her to pursue a career in business. She earned her degree from Northwestern University in 1941.
She started her first accounting firm in her basement while she was still pursuing her degree.
The city of Chicago has made September 30th Mary T. Washington Wylie Day .
There was an article posted in 2005 by the Journal of Accountancy entitled a History of determination, it discusses the adversity men and women of color faced in the profession, how that struggle continues today and her obituary.
Mary Thelma Washington is my personal hero, because of her I can!
The IRS, in its new proposed Section 199A regulations, defines when a rental property qualifies for the 20 percent tax deduction under new tax code Section 199A.
One part of the good news on this clarification is that it does not require that we learn any new regulations or rules. Existing rules govern. The existing rules require that you know when your rental is a tax law–defined rental business and when it is not. For the new 20 percent tax deduction under Section 199A, you want rentals that the tax law deems businesses.
You may find the idea of a rental property as a business strange because you report the rental on Schedule E of your Form 1040. But you will be happy to know that Schedule E rentals are often businesses for purposes of not only the Section 199A tax deduction but also additional tax code sections, giving you even juicier tax benefits.
Under the proposed regulations, you have two ways for the IRS to treat your rental activity as a business for the Section 199A deduction:
Your rental qualifying as a Section 162 trade or business gets you other important tax benefits:
If your rental activity doesn’t qualify as a Section 162 trade or business, it will qualify for the 20 percent Section 199A tax deduction if you rent it to a commonly controlled trade or business.
If you operate an out-of-favor business (known in the law as a “specified service trade or business”) and your taxable income is more than $207,500 (single) or $415,000 (married, filing jointly), your Section 199A deduction is easy to compute. It’s zero.
This out-of-favor specified service trade or business group includes any trade or business
It is illegal to avoid telling the tax man anything you do not want him to know, but legal not to tell him information you do not mind him knowing.
One of the funniest Fun Fact, this fact is an overly simplification of London's Tax Avoidance Schemes Regulations 2006.
If you are a small employer (fewer than 50 employees), you should consider the qualified small-employer health reimbursement account (QSEHRA) as a good way to help your employees with their medical expenses.
If the QSEHRA is indeed going to be your plan of choice, then you have three good reasons to get that QSEHRA plan in place on or before October 2, 2018. First, this avoids penalties. Second, your employees will have the time they need to select health insurance. Third, you will have your plan in place on January 1, 2019, when you need it.
One very attractive aspect of the QSEHRA is that it can reimburse individually purchased insurance without your suffering the $100-a-day per-employee penalty. The second and perhaps most attractive aspect of the QSEHRA is that you know your costs per employee. The costs are fixed—by you.
Eligible employer. To be an eligible employer, you must have fewer than 50 eligible employees and not offer group health or a flexible spending arrangement to any employee. For the QSEHRA, group health includes excepted benefit plans such as vision and dental, so don’t offer them either.
Eligible employees. All employees are eligible employees, but the QSEHRA may exclude
Dollar limits. Tax law indexes the dollar limits for inflation. The 2018 limits are $5,050 for self-only coverage and $10,250 for family coverage. For part-year coverage, you prorate the limit to reflect the number of months the QSEHRA covers the individual.
If you operate an specified service trade or business and your taxable income is more than $207,500 (single) or $415,000 (married, filing jointly), your Section 199A deduction is easy to compute. It’s zero.
This specified service trade or business group includes any trade or business:
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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.