Plan  ahead to avoid spooky surprises!

Can you believe it's bad Halloween pun season already? Here's our ghoulish attempt at making taxes less haunting: Planning ahead could be doubly important to avoid an unwanted tax fright this year; there were some major tax law changes which could fall into either the Trick OR Treat category depending on your situation. Below are some of the big changes that may affect you (and however you feel about the tricks and the treats in the tax bill--and recent politics in general--remember to vote in two weeks!)

Contact Us if you'd like to do some Year End Tax Planning:
We'd love to review your year thus far and discuss tax saving strategies for both the remainder of 2018 as well as starting off 2019 right.*

MORTGAGE INTEREST: If you have pulled equity out of your personal home for anything other than home improvements OR your loan exceeds $750,000, you may have new limits on your Mortgage Interest Deduction.

STATE AND LOCAL INCOME TAX: If your property taxes + state income taxes exceeds $10,000/year, your deduction may be capped. If you file Married Filing Separate, that cap is $5000.

EMPLOYEE JOB EXPENSES AND INVESTMENT FEES: If you normally have unreimbursed job expenses or fees on investment accounts, you won't be able to deduct on your federal tax return (but it MAY help on MN and some other states, so could be worth tracking still!). This does NOT affect self-employment deductions; only those for W2 jobs. 

Contact Us if you want to see how above will change your tax bill.*

Also discussed as the "Pass-Through" deduction, this is a brand new deduction for "Qualified Business Income" (QBI) that lands on a personal tax return (vs. on a Big C Corporation's tax return--they got a whole different tax break!) The QBI Deduction allows individuals to only pay federal tax on 80% of their "Qualified Business Income". This includes income from sole proprietorships, partnerships, S Corps and most likely rental properties (unless it's a purely passive investment vs. a business).

Of course, there are some stipulations. If your income exceeds certain levels, your deduction can phase out. If you are unmarried and taxable income is above $157,500 or if you are married and taxable income is above $315,000, there is a very steep curve on losing some of that potentially big reduction in income. If your income is exceeding those levels, you could be greatly rewarded for doing some added year end tax planning.

Contact Us if you want to do some year end planning for your business. We'd love to look over your income for the first 3/4 of the year and discuss options for Q4 and beyond.*

If you've made any big purchases for your business or rental properties (especially commercial property purchases/improvements), or are considering doing so either this year or early next year, we'd love to discuss how both the purchase itself and/or its timing could best help you. The new tax law changes a lot of depreciation rules and allows for added options to expense big asset purchases. 

Contact Us if you want to discuss how asset purchases may affect you and/or need some help deciding on timing of said purchases as end of year approaches.*

*We do charge $75/hour consulting rates for doing Year End Tax Planning. You can either come in to meet with your Tax Preparer OR you could email them directly with your Year-to-Date paystubs , an estimate of YTD business income and expenses and/or any specific questions you may have. Most consults take an hour or less and are pro-rated accordingly.