Small-business owners and partners are scratching their heads over the Tax Cuts and Jobs Act and how the new 20 percent tax deduction for pass-through entities will work. Here’s a little background A pass-through entity can be a partnership, S corporation, limited liability company or partnership, or sole proprietorship — basically, most of the country’s small businesses. Owners and shareholders of these entities are taxed on earnings based on individual, not corporate, tax rates. Effectively, company earnings, losses and deductions pass through to the individual’s personal tax rates, which, in the past, were typically lower than corporate rates. The pass-through
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Extraordinary Estate Tax Opportunity with the Tax Cuts and Jobs Act
You may recall that President Trump promised to repeal the Estate and Gift Tax and their cousin, the Generation Skipping Tax. However, the enacted version of the Tax Cuts and Jobs Act signed just before Christmas 2017, left these three taxes intact. The outcome is surprising, given that the Republican Party has often condemned these taxes, and given that the House, Senate, and White House are all on the same side of the party divide. Yet, complete repeal was not accomplished. Thus, these taxes remain a huge liability for high net worth individuals and families. What the Act does accomplish
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Newsletter and Updates.
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Bracket Changes and More From the IRS
You haven’t even filed your 2017 taxes yet, but the IRS has already announced changes that will affect your 2018 taxes, which you’ll be filing in 2019. The changes were announced in Revenue Procedure 2017-58, which runs 28 pages, but below are some key points. How do these changes impact you? Of course, if any meaningful tax reform is passed, anything can be changed. We’ll keep you posted on any developments that affect you. The standard deduction for married filing jointly rises to $13,000 for tax year 2018, up $300. For single taxpayers and married individuals filing separately, the standard deduction
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Industry News and Newsletter and Updates.
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Is This Your Situation: Wondering If An Audit Can Benefit You
Your privately owned business may not need a financial statement audit according to law, but that doesn’t mean you should skip it. Read through to learn why an audit can be a smart move. With the vicissitudes of change combined with technological advances, we’re living in an age of transparency where businesses are required to disclose more information about their taxes, financial records, operations and executive salaries. While private companies are spared the intense scrutiny of professional auditors and not required to provide an external review of their financial statements, there are advantages to having an external audit many business heads
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Newsletter and Updates.
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Big Changes in Social Security and Retirement Plans for 2018
From 401(k) plans to individual retirement accounts to Social Security, the federal government has been busy in recent weeks adjusting numbers for 2018. Whether you’re an employee or business owner, senior management or nonexempt staff, these changes may affect how you approach retirement in the coming months and years. Social Security: New ceilings First, let’s start with what is not changing. The 7.65 percent Social Security deduction remains the same. And as before, it’s doubled to 15.30 percent for the self-employed. However, the maximum earnings subject to Social Security rises from $127,200 to $128,700, a $1,500 increase. The Society for Human Resource
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Industry News and Newsletter and Updates.
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Senate Tax Plan Outline Released
The Senate Republican’s tax reform plan was released last week. Several proposals changed from the House Tax bill. The key changes in the plan from the current law are as follows: Individuals: Current tax rates: Seven brackets from 10% to 39.6%. Proposed tax rates: Seven brackets at 10%, 12%, 22.5%, 25%, 32.5%, 35% and 38.5%. Current standard deduction: $6,350 individuals and $12,700 married filing joint. Proposed standard deduction: $12,000 individuals and $24,000 married filing joint. Elimination of personal exemptions, worth $4,050 per person. Increase child tax credit from $1,000 to $1,650 and add a $500 credit for nonchild dependents. Eliminate
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Industry News and Newsletter and Updates.
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House Tax Bill Outline Released
On the heels of the recently passed 2018 budget resolution that allows for tax legislation to increase the federal deficit by $1.5 trillion over 10 years the House Republican leaders released details of its tax overhaul plan. The key changes in the plan from the current law are as follows: Individuals: Current tax rates: Seven brackets from 10% to 39.6%. Proposed tax rates: Four brackets at 12%, 25%, 35% and 39.6%. Current standard deduction: $6,350 individuals and $12,700 married filing joint. Proposed standard deduction: $12,000 individuals and $24,000 married filing joint. Elimination of personal exemptions, worth $4,050 per person. Increase
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Industry News and Newsletter and Updates.
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The Pros and Cons of Becoming an ESOP
An ESOP is not the only way for employees to own a company, but it is by far the most common. Although the concept was almost unknown until 1974, by 2014, about 7,000 companies had ESOPs covering 13.5 million employees, according to the National Center for Employee Ownership, a nonprofit membership group that provides information and research on ESOPs. An ESOP can work in a variety of ways. Employees can buy stock directly, be offered it as a bonus, receive stock options or obtain stock through a profit-sharing plan. Some employees become owners through worker cooperatives in which every staffer
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Estate and Gift Tax 2018 Inflation Adjustments
On October 19th, the IRS issued Revenue Procedure 2017-58, the annual inflation adjustments for 2018 for many tax provisions, including exemptions for estate, gift and generation-skipping transfer (GST) taxes as well as the annual exclusion amount for gifts as follows: Estate, Gift and GST Tax Exemption Increases to $5,600,000. For estates of decedents who pass away during 2018, and for gifts made during 2018, the combined estate and gift tax exemption will increase to $5,600,000, up from a total of $5,490,000 for estates of decedents in 2017. The generation-skipping transfer exemption increased as well to $5,600,000. In 2018 an individual can
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Industry News and Newsletter and Updates.
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Year-End Tax Planning Strategies
As the end of the year approaches, it is a good time to think of planning moves that will help lower your tax bill for this year and possibly the next. We have compiled a checklist of actions based on current tax rules that may help you save tax dollars if you act before year-end. Not all actions will apply in your particular situation, but you will likely benefit from many of them. We can narrow down the specific actions that you can take. In the meantime, please review the following list and contact us if you would like additional
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