Roger Rossmeisl, CPA, Author at Roger Rossmeisl, CPA

10 Sep 2018

(#386) Back-to-School Time Means a Tax Break for Teachers

When teachers are setting up their classrooms for the new school year, it’s common for them to pay for a portion of their classroom supplies out of pocket. A special tax break allows these educators to deduct some of their expenses. This educator expense deduction is especially important now due to some changes under the Tax Cuts and Jobs Act (TCJA). The old miscellaneous itemized deduction Before 2018, employee expenses were potentially deductible if they were unreimbursed by the employer and ordinary and necessary to the “business” of being an employee. A teacher’s out-of-pocket classroom expenses could qualify. But these expenses had to be claimed as a miscellaneous itemized deduction and were subject to a 2% of adjusted gross income (AGI) floor. This meant employees, including teachers, could...

10 Sep 2018

(#385) Keep it SIMPLE: A Tax-Advantaged Retirement Plan Solution for Small Businesses

Roger Rossmeisl, CPA

Taxes

If your small business doesn’t offer its employees a retirement plan, you may want to consider a SIMPLE IRA. Offering a retirement plan can provide your business with valuable tax deductions and help you attract and retain employees. For a variety of reasons, a SIMPLE IRA can be a particularly appealing option for small businesses. The deadline for setting one up for this year is October 1, 2018. The basics SIMPLE stands for “savings incentive match plan for employees.” As the name implies, these plans are simple to set up and administer. Unlike 401(k) plans, SIMPLE IRAs don’t require annual filings or discrimination testing. SIMPLE IRAs are available to businesses with 100 or fewer employees. Employers must contribute and employees have the option to contribute. The contributions are...

10 Sep 2018

(#384) Play Your Tax Cards Right With Gambling Wins and Losses

Roger Rossmeisl, CPA

Taxes

If you gamble, be sure you understand the tax consequences. Both wins and losses can affect your income tax bill. And changes under the Tax Cuts and Jobs Act (TCJA) could also have an impact. Wins and taxable income You must report 100% of your gambling winnings as taxable income. The value of complimentary goodies (“comps”) provided by gambling establishments must also be included in taxable income as winnings. Winnings are subject to your regular federal income tax rate. You might pay a lower rate on gambling winnings this year because of rate reductions under the TCJA. Amounts you win may be reported to you on IRS Form W-2G (“Certain Gambling Winnings”). In some cases, federal income tax may be withheld, too. Anytime a Form W-2G is issued, the...

10 Sep 2018

(#383) “The Crash Course” Chapter 15: Demographics

Roger Rossmeisl, CPA

Economic Concepts

As posted on the Peak Prosperity.com and the Chris Martenson's Peak Prosperity YouTube Channel Background The Crash Course has provided millions of viewers with the context for the massive changes now underway, as economic growth as we've known it is ending due to depleting resources. But it also offers real hope. Those individuals who take informed action today, while we still have time, can lower their exposure to these coming trends -- and even discover a better way of life in the process. In this Blog, I am presenting the 27 (inclusive of the introduction) installments of The Crash Course, one per week. Previous installments of "The Crash Course" can be found here: Blog (#311) Introducing "The Crash Course" Blog (#314) Chapter 1: Three Beliefs Blog (#319) Chapter 2: "The Three 'Es'" Blog...

04 Sep 2018

(#382) Some Business Tax Breaks are Coming Off the Menu

Roger Rossmeisl, CPA

Infographics

04 Sep 2018

(#381) Assessing the S Corporation

Roger Rossmeisl, CPA

Taxes

The S corporation business structure offers many advantages, including limited liability for owners and no double taxation (at least at the federal level). But not all businesses are eligible and, with the new 21% flat income tax rate that now applies to C corporations, S corps may not be quite as attractive as they once were. Tax Comparison The primary reason for electing S status is the combination of the limited liability of a corporation and the ability to pass corporate income, losses, deductions and credits through to shareholders. In other words, S corps generally avoid double taxation of corporate income — once at the corporate level and again when distributed to the shareholder. Instead, S corp tax items pass through to the shareholders’ personal returns and...

04 Sep 2018

(#380) Keep an Eye Out for Extenders Legislation

Roger Rossmeisl, CPA

Taxes

The pieces of tax legislation garnering the most attention these days are the Tax Cuts and Jobs Act (TCJA) signed into law last December and the possible “Tax Reform 2.0” that Congress might pass this fall. But for certain individual taxpayers, what happens with “extenders” legislation is also important. Recent History Back in December of 2015, Congress passed the PATH Act, which made a multitude of tax breaks permanent. However, there were a few valuable breaks for individuals that it extended only through 2016. The TCJA didn’t address these breaks, but they were retroactively extended through 12/31/17, by the Bipartisan Budget Act of 2018 (BBA), which was signed into law on 2/9/18. Now the question is whether Congress will extend them for 2018 and, if so, when. In...

04 Sep 2018

(#379) Choosing the Right Accounting Method for Tax Purposes

Roger Rossmeisl, CPA

Taxes

The Tax Cuts and Jobs Act (TCJA) liberalized the eligibility rules for using the cash method of accounting, making this method — which is simpler than the accrual method — available to more businesses. Now the IRS has provided procedures a small business taxpayer can use to obtain automatic consent to change its method of accounting under the TCJA. If you have the option to use either accounting method, it pays to consider whether switching methods would be beneficial. Cash vs. Accrual Generally, cash-basis businesses recognize income when it’s received and deduct expenses when they’re paid. Accrual-basis businesses, on the other hand, recognize income when it’s earned and deduct expenses when they’re incurred, without regard to the timing of cash receipts or payments. In most cases, a business...

04 Sep 2018