22 Jun 2019
0

Tax Implications of Selling Your Home

Roger Rossmeisl, CPA
Individual Tax Briefs
Tax Implications of Home Sales

Spring and summer are the optimum seasons for selling a home. And interest rates are currently attractive, so buyers may be out in full force in your area. Freddie Mac reports that the average 30-year fixed mortgage rate was 4.14% during the week of May 2, 2019, while the 15-year mortgage rate was 3.6%. This is down 0.41 and 0.43%, respectively, from a year earlier. But before you contact a realtor, you should review the tax implications of selling your home. Sellers can exclude some gain If you’re selling your principal residence, and you meet certain requirements, you can exclude up to $250,000 ($500,000 for joint filers) of gain. Gain that qualifies for the exclusion is also excluded from the 3.8% net investment income tax. To qualify for...

22 Jun 2019
0

Consider Checking Your Payroll Withholding

Roger Rossmeisl, CPA
Individual Tax Briefs
Consider Checking Your Payroll Withholding

Due to the massive changes in the Tax Cuts and Jobs Act (TCJA), the 2019 filing season resulted in surprises. Some filers who have gotten a refund in past years wound up owing money. The IRS reports that the number of refunds paid this year is down from last year — and the average refund is lower. As of May 10, 2019, the IRS paid out 101,590,000 refunds averaging $2,868. This compares with 102,582,000 refunds paid out in 2018 with an average amount of $2,940. Of course, receiving a tax refund shouldn’t necessarily be your goal. It essentially means you’re giving the government an interest-free loan. Law changes and withholding Last year, the IRS updated the withholding tables that indicate how much employers should hold back from their...

10 Jun 2019
0

Tax Savings for Electric Vehicles

Roger Rossmeisl, CPA
Individual Tax Briefs
Tax Savings for Electric Vehicles

While the number of plug-in electric vehicles (EVs) is still small compared with other cars on the road, it’s growing.  This is especially true in certain parts of the country. If you’re interested in purchasing an electric or hybrid vehicle, you may be eligible for tax savings for electric vehicles.  A federal income tax credit is available of up to $7,500. (Depending on where you live, there may also be state tax breaks and other incentives.) However, the federal tax credit is subject to a complex phaseout rule that may reduce or eliminate the tax break.  The phaseout is based on how many sales are made by a given manufacturer. The vehicles of two manufacturers have already begun to be phased out.  That means they now...

05 Jun 2019
0

Checking on Your Tax Refund Status

Roger Rossmeisl, CPA
Individual Tax Briefs
Checking on Your Tax Refund

It’s that time of year when many people who filed their tax returns in April are looking at their mail, bank accounts, and or otherwise checking on their tax refund status to see if their refunds have landed. According to the IRS, most refunds are issued in less than 21 calendar days. However, it may take longer — and in rare cases, refunds might not come at all. Your tax refund status If you’re curious about your tax refund status, you can use the IRS “Where’s My Refund?” tool. Go to https://bit.ly/2cl5MZo and click “Check My Refund Status.” You’ll need your Social Security number, your filing status (single, married joint filer, etc.) and your exact refund amount. In some cases, taxpayers who are expecting a refund may be...

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
0

(#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...

ROGER ROSSMEISL, CPA

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

(714) 325-0442
roger@khopatel.com

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