How Does the IRS Choose Who to Audit?
An IRS audit is an in-depth review of your tax return during which the IRS makes sure you are in strict compliance with the tax law and have documentation for every deduction you claimed. If not, they will disallow it and assess you back taxes, interest, and penalties. Penalties apply if the tax deficiency […]Read More
Differences Between a Tax Attorney and a Tax Accountant
People are often confused over whether to hire a tax attorney or a tax accountant to handle their tax issues. In many cases, the roles these individuals play can overlap. They both know a lot about taxes, charge about the same, and have a professional license. However, these professions have distinct roles. In some […]Read More
Highlights of the Tax Cuts and Jobs Act.
Changes Affecting Individuals New Income Tax Rates & Brackets. For tax years 2018 through 2025, seven tax rates apply for individuals: 10%, 12%, 22%, 24%, 32%, 35%, and 37%. The tax rates for estates and trusts are: 10%, 24%, 35%, and 37%. An individual reaches the highest tax rate at taxable income of $500,000 ($600,000 […]Read More
Changes Affecting Estates and Trusts
The new Tax Cuts & Jobs Act signed by the President on December 22, 2017 contains several key estate and trust provisions. Keep in mind that these changes only apply in 2018 through 2025. Among the changes affecting estate planning are: Increased Estate, Gift, and GST Tax Exclusion/Exemption. The new law doubles the estate, gift, […]Read More
New 20% Deduction for Pass-Through Entities
Starting in 2018, taxpayers are allowed a deduction equal to 20 percent of the lesser of a) their “qualified business income” from partnerships, S corporations, LLCs, and sole proprietorships, or b) their taxable income. The income must be from a domestic business. Therefore, investment income (i.e. interest, dividends, royalties, etc.) does not qualify. Nor do […]Read More
Changes Affecting Businesses
Below are just a few of the many changes affecting businesses. Corporate Tax Rates Reduced. For tax years beginning after Dec. 31, 2017, the corporate tax rate is a flat 21% rate. This applies to personal service corporations, as well, which are subject to a maximum corporate tax rate of 35% before 2018. Personal service […]Read More
State and Local Tax Deductions Limited
For tax years 2018 through 2025, the new Act limits deductions for state and local taxes paid by individual taxpayers to $10,000 in a single year. Prior to 2018, these taxes were fully deductible, except where the alternative minimum tax applied, which was often. Under the new rules, the total deduction for state and local […]Read More