05 Jun 2019
0

Casualty Loss Deductions Limited by TCJA to Federally Declared Disasters

Roger Rossmeisl, CPA
Individual Tax Briefs
TCJA Limits Casualty Loss Deductions

Unforeseen disasters happen all the time and they may cause damage to your home or personal property. Before the Tax Cuts and Jobs Act (TCJA), eligible casualty loss victims could claim a deduction on their tax returns. But there are new restrictions that make these casualty loss deductions much more difficult to take. What’s considered a casualty for tax purposes? It’s a sudden, unexpected or unusual event, such as a hurricane, tornado, flood, earthquake, or fire; an accident or act of vandalism; or even a terrorist attack. Unfavorable changes for casualty loss deductions TCJA made changes for losses incurred in 2018 through 2025.  Generally eliminated are personal casualty loss deductions, except for losses due to federally declared disasters. During 2019, there were presidential declarations of major disasters in...

13 May 2019
0

Deducting Medicare Premiums to Lower Your Tax

Roger Rossmeisl, CPA
Individual Tax Briefs
Deducting Medicare Premiums

Americans who are 65 and older qualify for basic Medicare insurance.  However, to get the level of coverage they desire, they may need to pay additional premiums. The premiums can be expensive, especially if you’re married and both you and your spouse are paying them. But one aspect of paying premiums might be positive. If you qualify, deducting Medicare premiums may help lower your tax bill. Medicare premium tax deductions Premiums for Medicare health insurance can be combined with other qualifying health care expenses.  Collectively, they allow you to claim an itemized deduction for medical expenses on your individual tax return. This includes amounts for “Medigap” insurance and Medicare Advantage plans. Some people buy Medigap policies because Medicare Parts A and B don’t cover all their health...

10 May 2019
0

1040 Questions After You’ve Filed

Roger Rossmeisl, CPA
Individual Tax Briefs
Questions

Alright . . . you've successfully filed your 2018 return with the IRS.  But now, you find that you've may still have some 1040 questions after you've filed. Here are brief answers to three questions that we’re frequently asked at this time of year. 1040 Questions #1: What tax records can I throw away now? At a minimum, keep tax records related to your return for as long as the IRS can audit your return or assess additional taxes. In general, the statute of limitations is three years after you file your return. So you can generally get rid of most records related to tax returns for 2015 and earlier years. (If you filed an extension for your 2015 return, hold on to your records until...

18 Apr 2019
0

(#535) Still Working After Age 70-1/2? You May Not Have to Begin 401(k) Withdrawals

Roger Rossmeisl, CPA
Individual Tax Briefs

If you participate in a qualified retirement plan, such as a 401(k), you must generally begin taking required minimum withdrawals (RMDs) from the plan no later than April 1 of the year after which you turn age 70½. However, there’s an exception that applies to certain plan participants who are still working for the entire year in which they turn 70½. The basics of RMDs RMDs are the amounts you’re legally required to withdraw from your qualified retirement plans and traditional IRAs after reaching age 70½. Essentially, the tax law requires you to tap into your retirement assets — and begin paying taxes on them — whether you want to or not. Under the tax code, RMDs must begin to be taken from qualified pension, profit sharing and...

17 Apr 2019
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(#531) Stretch Your College Student’s Spending Money With The Dependent Tax Credit

Roger Rossmeisl, CPA
Individual Tax Briefs

If you’re the parent of a child who is age 17 to 23, and you pay all (or most) of his or her expenses, you may be surprised to learn you’re not eligible for the child tax credit. But there’s a dependent tax credit that may be available to you. It’s not as valuable as the child tax credit, but when you’re saving for college or paying tuition, every dollar counts! Background of the credits The Tax Cuts and Jobs Act (TCJA) increased the child credit to $2,000 per qualifying child under the age of 17. The law also substantially increased the phaseout income thresholds for the credit so more people qualify for it. Unfortunately, the TCJA eliminated dependency exemptions for older children for 2018 through 2025....

02 Apr 2019
0

(#526) The 2018 Gift Tax Return Deadline is Almost Here

Roger Rossmeisl, CPA
Individual Tax Briefs

Did you make large gifts to your children, grandchildren or other heirs last year? If so, it’s important to determine whether you’re required to file a 2018 gift tax return — or whether filing one would be beneficial even if it isn’t required. Filing requirements Generally, you must file a gift tax return for 2018 if, during the tax year, you made gifts: That exceeded the $15,000-per-recipient gift tax annual exclusion (other than to your U.S. citizen spouse), That you wish to split with your spouse to take advantage of your combined $30,000 annual exclusion, That exceeded the $152,000 annual exclusion for gifts to a non-citizen spouse, To a §529 college savings plan and wish to accelerate up to five years’ worth of annual exclusions ($75,000) into...

01 Apr 2019
0

(#522) Vehicle Expense Deduction Ins and Outs for Individual Taxpayers

Roger Rossmeisl, CPA
Individual Tax Briefs

It’s not just businesses that can deduct vehicle-related expenses. Individuals also can deduct them in certain circumstances. Unfortunately, the Tax Cuts and Jobs Act (TCJA) might reduce your deduction compared to what you claimed on your 2017 return. For 2017, miles driven for business, moving, medical and charitable purposes were potentially deductible. For 2018 through 2025, business and moving miles are deductible only in much more limited circumstances. TCJA changes could also affect your tax benefit from medical and charitable miles. Current limits vs. 2017 Before 2018, if you were an employee, you potentially could deduct business mileage not reimbursed by your employer as a miscellaneous itemized deduction. But the deduction was subject to a 2% of adjusted gross income (AGI) floor, which meant that mileage was deductible...

21 Mar 2019
0

(#518) Careful Tax Planning Required for Incentive Stock Options

Roger Rossmeisl, CPA
Individual Tax Briefs

Incentive stock options (ISOs) are a popular form of compensation for executives and other employees of corporations. They allow you to buy company stock in the future at a fixed price equal to or greater than the stock’s fair market value on the ISO grant date. If the stock appreciates, you can buy shares at a price below what they’re then trading for. But careful tax planning is required because of the complex rules that apply. Tax advantages abound Although ISOs must comply with many rules, they receive tax-favored treatment. You owe no tax when ISOs are granted. You also owe no regular income tax when you exercise ISOs. There could be alternative minimum tax (AMT) consequences, but the AMT is less of a risk now because...

06 Mar 2019
0

(#512) Some of Your Deductions May Be Smaller (or Non-Existent) When You File Your 2018 Tax Return

Roger Rossmeisl, CPA
Individual Tax Briefs

While the Tax Cuts and Jobs Act (TCJA) reduces most income tax rates and expands some tax breaks, it limits or eliminates several itemized deductions that have been valuable to many individual taxpayers. Here are five deductions you may see shrink or disappear when you file your 2018 income tax return: 1. State and local tax deduction. For 2018 through 2025, your total itemized deduction for all state and local taxes combined — including property tax — is limited to $10,000 ($5,000 if you’re married and filing separately). You still must choose between deducting income and sales tax; you can’t deduct both, even if your total state and local tax deduction wouldn’t exceed $10,000. 2. Mortgage interest deduction. You generally can claim an itemized deduction for interest...

05 Mar 2019
0

(#507) 3 Big TCJA Changes Affecting 2018 Individual Tax Returns and Beyond

Roger Rossmeisl, CPA
Individual Tax Briefs

When you file your 2018 income tax return, you’ll likely find that some big tax law changes affect you — besides the much-discussed tax rate cuts and reduced itemized deductions. For 2018 through 2025, the Tax Cuts and Jobs Act (TCJA) makes significant changes to personal exemptions, standard deductions and the child credit. The degree to which these changes will affect you depends on whether you have dependents and, if so, how many. It also depends on whether you typically itemize deductions. 1. No more personal exemptions For 2017, taxpayers could claim a personal exemption of $4,050 each for themselves, their spouses and any dependents. For families with children and/or other dependents, such as elderly parents, these exemptions could really add up. For 2018 through 2025, the...

ROGER ROSSMEISL, CPA

Kho & Patel CPAs
160 E. Arrow Highway
San Dimas, CA 91773

(714) 325-0442
roger@khopatel.com

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