21 Apr 2018
0

(#298) Casualty Losses Can Provide a 2017 Deduction, But Rules Tighten for 2018

Roger Rossmeisl, CPA
Taxes

If you suffered damage to your home or personal property last year, you may be able to deduct these “casualty” losses on your 2017 federal income tax return. For 2018 through 2025, however, the Tax Cuts and Jobs Act suspends this deduction except for losses due to an event officially declared a disaster by the President. What is a casualty? It’s a sudden, unexpected or unusual event, such as a natural disaster (hurricane, tornado, flood, earthquake, etc.), fire, accident, theft or vandalism. A casualty loss doesn’t include losses from normal wear and tear or progressive deterioration from age or termite damage. Here are some things you should know about deducting casualty losses on your 2017 return: When to deduct Generally, you must deduct a casualty loss on your return...

21 Apr 2018
0

(#297) Is Your Personal Data Safe in the Hands of Corporations?

Roger Rossmeisl, CPA
Current Events, Social Thoughts

The Facebook scandal involving personal data mishandled by Cambridge Analytica has raised concerns over the privacy of the information we share on our social media accounts.  Some countries have gone as far as to legislate Internet data privacy with laws granting the “right to be forgotten.”  Yet Facebook CEO Mark Zuckerberg says we don’t need such regulations here in the states. Is he right? And though California has been a leader in privacy, the last meaningful update to the state’s privacy laws was in the 1980s, long before today’s technology. Investigative journalist Ben Swann provides a "Reality Check". Ben Swann is an Emmy winning American television news anchor and investigative journalist who most recently worked at CBS affiliate WGCL-TV in Atlanta, Georgia as chief evening news anchor from 2015 to 2018.  His...

21 Apr 2018
0

(#296) TCJA Provides AMT Relief

Roger Rossmeisl, CPA
Taxes

As posted by Thomson Reuters on 2/20/18 Although it was hoped that tax reform discussions would yield the complete repeal of the individual Alternative Minimum Tax (AMT), it nevertheless is still in force under the Tax Cuts and Jobs Act (TCJA).  That said, the rules under AMT have become more taxpayer-friendly.  In addition, other changes within TCJA have the effect of mitigating the possibility that AMT will impact taxpayers for the period 2018-2025.  So beginning with 2018, many taxpayers to which AMT applied will find that this is no longer the case whereas others will find that the amount of AMT owed will have decreased. This Tax Planning Letter provides an overview of the changes to the AMT in 2018-2015 as compared with the pre-TCJA law still...

16 Apr 2018
0

(#294) Home-Related Tax Breaks are Valuable on 2017 Returns . . . Less So for 2018

Roger Rossmeisl, CPA
Taxes

Home ownership is a key element of the American dream for many, and the U.S. tax code includes many tax breaks that help support this dream. If you own a home, you may be eligible for several valuable breaks when you file your 2017 return. But under the Tax Cuts and Jobs Act (TCJA), your home-related breaks may not be as valuable when you file your 2018 return next year. 2017 vs 2018 Here’s a look at various home-related tax breaks for 2017 vs 2018: Property tax deduction For 2017, property tax is generally fully deductible — unless you’re subject to the alternative minimum tax (AMT). For 2018, your total deduction for all state and local taxes, including both property taxes and either income taxes or sales taxes, is...

16 Apr 2018
0

(#293) §179 Expensing Provides Small Businesses Tax Savings on 2017 Returns, And In The Future

Roger Rossmeisl, CPA
Taxes

If you purchased qualifying property by 12/31/17, you may be able to take advantage of §179 expensing on your 2017 tax return. You’ll also want to keep this tax break in mind in your property purchase planning, because the Tax Cuts and Jobs Act (TCJA), signed into law this past December, significantly enhances it beginning in 2018. 2017 §179 benefits §179 expensing allows eligible taxpayers to deduct the entire cost of qualifying new or used depreciable property and most software in Year 1, subject to various limitations. For tax years that began in 2017, the maximum §179 deduction is $510,000. The maximum deduction is phased out dollar for dollar to the extent the cost of eligible property placed in service during the tax year exceeds the...

16 Apr 2018
0

(#292) Defer Tax with a §1031 Exchange, But New Limits Apply This Year

Roger Rossmeisl, CPA
Taxes

Normally when appreciated business assets such as real estate are sold, tax is owed on the appreciation. But there’s a way to defer this tax: a §1031 “like kind” exchange. However, the Tax Cuts and Jobs Act (TCJA) reduces the types of property eligible for this favorable tax treatment. What is a like-kind exchange? Section 1031 of the Internal Revenue Code allows you to defer gains on real or personal property used in a business or held for investment if, instead of selling it, you exchange it solely for property of a “like kind.” Thus, the tax benefit of an exchange is that you defer tax and, thereby, have use of the tax savings until you sell the replacement property. This technique is especially flexible for real estate,...

16 Apr 2018
0

(#291) Haven’t Filed Your 2017 Income Tax Return Yet? Beware of These Pitfalls

Roger Rossmeisl, CPA
Taxes

The federal income tax filing deadline is slightly later than usual this year — April 17 — but it’s now nearly upon us. So, if you haven’t filed your individual return yet, you may be thinking about an extension. Or you may just be concerned about meeting the deadline in the eyes of the IRS. Whatever you do, don’t get tripped up by one of these potential pitfalls. Filing for an extension Filing for an extension allows you to delay filing your return until the applicable extension deadline, which for 2017 individual tax returns is October 15, 2018. While filing for an extension can provide relief from April 17 deadline stress and avoid failure-to-file penalties, there are some possible pitfalls: If you expect to owe tax, to avoid...

11 Apr 2018
0

(#289) Make Sure Repairs to Tangible Property Were Actually Repairs Before You Deduct the Cost

Roger Rossmeisl, CPA
Taxes

Repairs to tangible property, such as buildings, machinery, equipment or vehicles, can provide businesses a valuable current tax deduction — as long as the so-called repairs weren’t actually “improvements.” The costs of incidental repairs and maintenance can be immediately expensed and deducted on the current year’s income tax return. But costs incurred to improve tangible property must be depreciated over a period of years. So the size of your 2017 deduction depends on whether the expense was a repair or an improvement. Betterment, restoration or adaptation In general, a cost that results in an improvement to a building structure or any of its building systems (for example, the plumbing or electrical system) or to other tangible property must be depreciated. An improvement occurs if there was a betterment,...

ROGER ROSSMEISL, CPA

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

(714) 325-0442
roger@khopatel.com

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