As posted by Thomson Reuters on 2/13/18 Before the Tax Cuts and Jobs Act (TCJA), taxpayers could generally deduct 50% of business-related meal and entertainment expenses, and exceptions allowed bigger deductions in certain circumstances. The TCJA shifts the playing field for expenses paid or incurred after 12/31/17. This Tax Planning Letter explains how meal, food and beverage, and entertainment expenses were treated under prior law and how they are treated now. Under prior law, taxpayers could generally deduct 50% of business-related meal and entertainment expenses incurred or paid before 1/1/18 (former §274(n)). Taxpayers had to establish that the expenses were directly related to or associated with the active conduct of a trade or business or income-producing activity. The general 50% deductibility rule applied to all business-related meals...

If you’re planning on buying a home that you one day wish to pass on to your adult children, a joint purchase can reduce estate tax liability, provided the children have sufficient funds to finance their portion of the purchase. With the gift and estate tax exemption now set at an inflation-adjusted $10 million thanks to the Tax Cuts and Jobs Act (TCJA), federal estate taxes are less of a concern for most families. However, the high exemption amount is only temporary, and there’s potentially state estate tax risk to consider. Current and remainder interests The joint purchase technique is based on the concept that property can be divided not only into pieces, but also over time: One person (typically of an older generation) buys a current interest...

Current Law Under the current rules, an individual who pays alimony or separate maintenance may deduct an amount equal to the alimony or separate maintenance payments paid during the year as an “above-the-line” deduction. (An “above-the-line” deduction, i.e., a deduction that a taxpayer need not itemize deductions to claim, is generally more valuable for the taxpayer than an itemized deduction.) And, under current rules, alimony and separate maintenance payments are taxable to the recipient spouse (includible in that spouse's gross income). New Law However, new rules are coming soon. Under the Tax Cuts and Jobs Act (TCJA) rules, there is no deduction for alimony for the payer. Furthermore, alimony is not gross income to the recipient. So for divorces and legal separations that are executed (i.e., that come...

"The Global Dollar Standard was Put in Place by a Series of Accidental Events that were Very Fortunate for the United States Because it Gave Us an Advantage over the Rest of the World" As posted to the GoldSilver YouTube Channel on 9/24/2013 You may have heard stories on the news lately that suggest an international move away from the US Dollar is underway...

Many businesses hired in 2017, and more are planning to hire in 2018. If you’re among them and your hires include members of a “target group,” you may be eligible for the Work Opportunity tax credit (WOTC). If you made qualifying hires in 2017 and obtained proper certification, you can claim the WOTC on your 2017 tax return. Whether or not you’re eligible for 2017, keep the WOTC in mind in your 2018 hiring plans. Despite its proposed elimination under the House’s version of the Tax Cuts and Jobs Act, the credit survived the final version that was signed into law in December, so it’s also available for 2018. “Target groups,” defined Target groups include: Qualified individuals who have been unemployed for 27 weeks or more, Designated community...

If reducing your taxable estate is an important estate planning goal, making lifetime charitable donations can help achieve that goal and benefit your favorite organizations. In addition, by making donations during your lifetime, rather than at death, you can claim income tax deductions. But some of your charitable deductions could be denied if you don’t follow IRS rules. 3 things to be aware of First, the recipient charity must be a qualified charitable organization: It must have a tax-exempt status. The IRS has developed a tool on its website — the Exempt Organizations Select Check — that allows users to search for a specific tax-exempt organization, check its federal tax status and learn about tax forms the charity may file that are up for public review. Second, the...

Working from home has become commonplace. But just because you have a home office space doesn’t mean you can deduct expenses associated with it. And for 2018, even fewer taxpayers will be eligible for a home office deduction. Changes under the TCJA For employees, home office expenses are a miscellaneous itemized deduction. For 2017, this means you’ll enjoy a tax benefit only if these expenses plus your other miscellaneous itemized expenses (such as unreimbursed work-related travel, certain professional fees and investment expenses) exceed 2% of your adjusted gross income. For 2018 through 2025, this means that, if you’re an employee, you won’t be able to deduct any home office expenses. Why? The Tax Cuts and Jobs Act (TCJA) suspends miscellaneous itemized deductions subject to the 2% floor for...