Categories for Tax News

Nov
05
2018

Could “bunching” medical expenses into 2018 save you tax?





Some of your medical expenses may be tax deductible, but only if you itemize deductions and have enough expenses to exceed the applicable floor for deductibility. With proper planning, you may be able to time controllable medical expenses to your tax advantage. The Tax Cuts and Jobs Act (TCJA) could make bunching such expenses into 2018 beneficial for some taxpayers. At the same time, certain taxpayers who’ve benefited from the deduction in previous years might no longer benefit because of the TCJA’s increase to the standard deduction.

Nov
02
2018

The fine art of valuing donated property





Not-for-profits often struggle with valuing noncash and in-kind donations. Although the amount that a donor can deduct generally is based on the donation’s fair market value (FMV), there’s no single formula for calculating it. FMV is the price that property would sell for on the open market. There are three particularly relevant FMV factors: 1) original cost or selling price of the donated item, 2) sales price of property similar to the donated item and 3) replacement cost.

Nov
01
2018

2018 – SALT Limit Workarounds





The IRS has clarified that state tax credit programs, to which businesses can make payments in exchange for credits against various taxes, aren’t affected by the recent proposed regulations targeting state and local tax (SALT) limit workarounds. That’s true as long as the taxes are deductible under other code sections. These taxes include insurance premium tax, direct pay sales and use tax, corporate income tax and alcohol excise tax. Proposed IRS regs target SALT limit workarounds implemented in some high-tax states.

Oct
29
2018

Innocent Spouse Relief





In general, married taxpayers who file joint tax returns are jointly and individually liable for the tax due on them. But spouses may be eligible for “innocent spouse” relief if they can prove they didn’t know about a tax understatement. In one new case, the U.S. Tax Court ruled that a disabled ex-wife qualified for relief because she showed that it would be inequitable to hold her liable. She had been living apart from her ex-husband,

Oct
27
2018

Consider all the tax consequences before making gifts to loved ones





Many people choose to pass assets to the next generation during life, whether to reduce the size of their taxable estate, to help out family members or simply to see their loved ones enjoy the gifts. If you’re considering lifetime gifts, be aware that which assets you give can affect the tax consequences. For example, to minimize your heir’s income tax, gift property that hasn’t appreciated significantly while you’ve owned it.

Oct
26
2018

Per-diem rate change





The simplified per-diem rates are increasing for post-9/30/18 business travel. The IRS issued a notice of the “high-low” simplified per-diem rates for post-9/30/18 travel. The high-cost area per-diem increases to $287 (from $284) and the low-cost area per-diem increases to $195 (from $191). Under the high-low substantiation method, there’s one uniform per-diem rate for all “high-cost” areas within the continental United States, and another rate for all other areas. The IRS also made changes to its list of localities considered “high cost.” (Notice 2018-77)

Oct
25
2018

529 plans offer two tax-advantaged education funding options





Section 529 plans are a popular education-funding tool because of tax and other benefits. Two types are available: 1) prepaid tuition plans, and 2) savings plans. A prepaid tuition plan guarantees tuition regardless of its cost when the child attends the school. A savings plan can fund expenses beyond college tuition on a tax-free basis. The TCJA expands the definition of qualified expenses to generally include elementary and secondary school tuition.

Oct
23
2018

Charitable IRA rollovers may be especially beneficial in 2018





If you’re age 70 1/2 or older, you can make direct contributions (up to $100,000 annually) from your IRA to a qualified charity without owing any income tax on the distributions. This break may be especially beneficial now because of TCJA changes that affect who can benefit from the itemized deduction for charitable donations. While you might be able to achieve a similar result from taking the RMD, contributing that amount to charity and taking an itemized deduction for the donation,