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​​​​​​​​Personal Tax Tips For 2018 Filings


Medical Expenses

  • The 10% threshold for medical expenses has been reduced to the  prior tax law limit of 7.5%, retroactive for tax years after Dec. 31, 2016.. If you qualify, you shouldn't overlook all possible expenses. Sometimes, it's even best for married couples to consider filing separately if one partner has high medical bills.


Moving Expenses

  • Have been suspended under the Tax Cuts and Jobs Act except for members of the Armed Forces on Military duty.


Mortgage Interest Points

  • Points paid on a home mortgage are usually deductible as interest. If the mortgage is for the purchase or improvement of your principal residence, you can either deduct the full amount of the points in the year of payment or, if you're not itemizing your deductions that year, pay back the points over the loan term. Refinanced debt prior to Dec. 15, 2017 does not fall into the lower limits introduced for tax years after 2017-2026 with maximum indebtedness capped at $750,000.


Retirement Plan and Other Investment Strategies

  • One of the most powerful tax shelters available is a qualified retirement plan. Within certain limits, contributions to fund the plan are immediately tax deductible, plan investment earnings are tax deferred, and plan participants do not have to pay income taxes on benefits until they receive their distributions.
  • If you believe  a Roth IRA  is better than a traditional IRA, and you want to remain in the market for the long term, consider converting traditional-IRA money invested in beaten-down stocks ( or mutual funds) into a Roth IRA if eligible to do so. Keep in mind, however, that such a conversion will increase your adjusted gross income.

  • Realize losses on stock while substantially preserving your investment position. Capital gain and loss rates remain intact in 2018.​

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​ Business Tax Tips​​


Business Automobiles
You can claim deductions for the business-related use of an auto using either the standard mileage rate method or the actual expense method. You should use the method that will yield the largest deduction.    


Home Office Expenses                                                                     
To qualify for a deduction related to an office in the home, you must have an area of your home used exclusively as your principal place of business. This includes a place of business where you meet or deal with patients, clients, or customers.

Profit-Sharing Plans
Unlike other plans, a profit-sharing plan is flexible. It can be designed so that the employer is not required to make an annual contribution.


Overall tax rates have decreased in 2018 with 7 updated individual tax rates that apply starting at the lowest rate of 10% up to a maximum individual tax rate of 37%. The new standard deduction for those married filing jointly is $24, 000. Corporate tax rates have been reduced to a flat 21% and a pass through deduction is allowed for Partnerships, S Corps, and Sole Proprietors. There is an  increased 179 business depreciation expense deduction of up to 1M. As well as, the luxury car maximum allowable depreciation has increased to 10K in the first year. Net Operating Loss carry-back has been suspended in 2018 , however, the NOL can be carried forward indefinitely.






 

 THE "tax cuts and jobs act"  2018 Tax law advantages




INCOME TAX Tips


Call us: 305-936-8333

Email: info@miamibeachcpa.com

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