10 Apr 2018
0

(#288) Size of Charitable Deductions Depends on Many Factors

Roger Rossmeisl, CPA
Taxes

Whether you’re claiming charitable deductions on your 2017 return or planning your donations for 2018, be sure you know how much you’re allowed to deduct. Your deduction depends on more than just the actual amount you donate. TYPE OF GIFT One of the biggest factors affecting your deduction is what you give: Cash You may deduct 100% gifts made by check, credit card or payroll deduction. Ordinary-income property For stocks and bonds held one year or less, inventory, and property subject to depreciation recapture, you generally may deduct only the lesser of fair market value or your tax basis. Long-term capital gains property You may deduct the current fair market value of appreciated stocks and bonds held for more than one year. Tangible personal property Your deduction depends on the situation: If the property isn’t...

10 Apr 2018
0

(#287) 5 Estate Planning Tips for the Sandwich Generation

Roger Rossmeisl, CPA
Estate Planning Briefs

The “sandwich generation” accounts for a large segment of the population. These are people who find themselves caring for both their children and their parents at the same time. In some cases, this includes providing parents with financial support. As a result, estate planning — which traditionally focuses on providing for one’s children — has expanded in many cases to include aging parents as well. Including your parents as beneficiaries of your estate plan raises a number of complex issues. Here are five tips to consider: 1. Plan for long-term care (LTC) The annual cost of LTC can reach well into six figures. These expenses aren’t covered by traditional health insurance policies or Medicare. To prevent LTC expenses from devouring your parents’ resources, work with them to develop a...

26 Mar 2018
0

(#286) What’s Your Mileage Deduction?

Roger Rossmeisl, CPA
Taxes

Individuals can deduct some vehicle-related expenses in certain circumstances. Rather than keeping track of the actual costs, you can use a standard mileage rate to compute your deductions. For 2017, you might be able to deduct miles driven for business, medical, moving and charitable purposes. For 2018, there are significant changes to some of these deductions under the Tax Cuts and Jobs Act (TCJA). Mileage rates vary The rates vary depending on the purpose and the year: 2017 2018 Business 53.5¢ 54.5¢ Medical 17¢ 18¢  Moving 17¢ 18¢  Charitable 14¢ 14¢ The business standard mileage rate is considerably higher than the medical, moving and charitable rates because the business rate contains a depreciation component. No depreciation is allowed for the medical, moving or charitable use of a vehicle. The charitable rate is lower than the medical and moving rate because it isn’t...

26 Mar 2018
0

(#284) Tax Deduction for Moving Costs: 2017 vs 2018

Roger Rossmeisl, CPA
Taxes

If you moved for work-related reasons in 2017, you might be able to deduct some of the costs on your 2017 return — even if you don’t itemize deductions. (Or, if your employer reimbursed you for moving expenses, that reimbursement might be excludable from your income.) The bad news is that, if you move in 2018, the costs likely won’t be deductible, and any employer reimbursements will probably be included in your taxable income. Suspension for 2018–2025 The Tax Cuts and Jobs Act (TCJA), signed into law this past December, suspends the moving expense deduction for the same period as when lower individual income tax rates generally apply: 2018 through 2025. For this period it also suspends the exclusion from income of qualified employer reimbursements of moving...

26 Mar 2018
0

(#283) How Many More Times Can the World be Twice as Big?

Roger Rossmeisl, CPA
Economic Concepts

As  posted on the PBS NewsHour YouTube Channel on 5/23/14 PBS NewsHour economics correspondent Paul Solman speaks with former pharmaceutical executive Chris Martenson, who now lives in rural Massachusetts, about exponential growth and the danger of rising debt. “We have an economy that’s based on growth.  We want it to grow all the time.  Not a lot . . . 3% real, maybe 5% nominal growth.  We’d like jobs to grow . . . we’d like to see more auto sales next year . . . more houses sold . . . and it’s always on a percentage basis.  Whenever anything is growing by some percent amount over a unit of time, it takes a characteristic curve shape.  It’s not a straight line.  It takes off so-to-say,...

25 Mar 2018
0

(#282) Impact of TCJA on Business Deductions for Meals & Entertainment

Roger Rossmeisl, CPA
Taxes

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...

19 Mar 2018
0

(#281) A Joint Home Purchase Can Ease Estate Tax Liability

Roger Rossmeisl, CPA
Taxes

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...

19 Mar 2018
0

(#279) Tax Treatment of Alimony Under TCJA

Roger Rossmeisl, CPA
Taxes

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...

ROGER ROSSMEISL, CPA

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

(714) 325-0442
roger@khopatel.com

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