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Positive Prognosis for Medical Deductions

Many miscellaneous itemized deductions, including unreimbursed employee business expenses no longer can be used to reduce your income, starting with 2018 tax returns. Some observers predicted a similar demise for medical and dental expenses. As it turned out, these deductions not only were retained, the tax benefit was enhanced. Playing the percentages Under the law in effect during 2017,... Read More

Regard Roth Conversion Carefully

The article “Rethinking retirement contributions” explains why the new TCJA devalues putting money into traditional tax-deferred plans and favors Roth versions. Does the same reasoning apply to conversions from Roth to traditional accounts? From a tax viewpoint, the answer may be yes, but other factors indicate you should be cautious about such moves. Example 1: Fred and Glenda Polk would have had... Read More

Do You Know Your True Tax Rate?

It has been widely reported that the TCJA lowers federal income tax rates for many people. The highest tax rate, for example, has fallen from 39.6% to 37%. Many people who are in lower brackets also stand to benefit. Example 1: Alice Young had $100,000 of taxable income in 2017. As a single filer, Alice was in the 28% tax bracket. If Alice has that same $100,000 in taxable income in 2018, she will be in a... Read More

Are State and Local Taxes a Reason To Move

As many people are all too aware, some states and localities impose higher income and property taxes than others. Residents of high tax areas may have taken some solace by itemizing deductions on their tax returns and reducing federal income tax obligations by deducting the taxes paid. Example: Jennifer Knight deducted $25,000 worth of state income tax and local property tax on her 2017 tax return.... Read More

April/May Dates to Remember

April 17 Individuals. File a 2017 income tax return. If you want an automatic six-month extension of time to file the return, file Form 4868, “Application for Automatic Extension of Time To File U.S. Individual Income Tax Return.” Then, file Form 1040, 1040A, or 1040EZ by October 15. If you are not paying your 2018 income tax through withholding (or will not pay in enough tax during the year that way),... Read More

New Tax Benefit for Pass-Through Entities

Many small businesses are pass-through entities, including S corporations, partnerships, sole proprietorships, LLCs, and LLPs. The label indicates that all business earnings are passed through to the owners’ personal income tax returns. Thus, they avoid the corporate income tax. The TCJA contains a new tax benefit for pass-throughs. This provision is complex, but it is relatively straightforward for... Read More

Is Your Employer’s Retirement Plan Getting Less Attractive?

The TCJA generally lowered federal income tax rates, with some exceptions. Among the ways in which lower rates impact tax planning, they make unmatched contributions to traditional employer retirement plans less attractive. Example 1: Chet Taylor has around $100,000 in taxable income a year. Chet contributed $12,000 to his company’s traditional 401(k) in 2017, reducing his taxable income. He was in the... Read More

Corporate, Personal Income Taxes: Governor Signs IRC Conformity Update and Rate Cut.

Georgia has adopted legislation that: updates the corporate and personal income tax federal Internal Revenue Code (IRC) conformity date to February 9, 2018, with certain exceptions; doubles the standard deduction, effective January 1, 2018 and expiring December 31, 2025; lowers the top income tax rate for businesses and individuals from 6% to 5.75%, effective January 1, 2019 and expiring December... Read More

HLB International Appoints New Member in Costa Rica

HLB International, one of the leading global accountancy networks with presence in 150 countries, continues its growth with the recent signing of a new member firm in Costa Rica, Grupo Camacho Internacional S. A. This is a major move and will have a big impact on the Central American market. Grupo Camacho Internacional S. A. is based in San Jose, the capital city of Costa Rica. Established... Read More