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Mar 01
Love2

Is A Roth IRA Right For You?

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Generally, making Roth contributions can be a good choice if you’re in a lower tax bracket now and don’t expect your tax bracket to decrease in retirement. If you have earned income and meet certain income limitations, you can contribute up to $5,500 ($6,500 if age 50 or older) for 2017 and 2018. You still have until April 17, 2018, to make your 2017 tax year contribution.

Benefits of Roth IRAs include:

  1. Tax-free income
  • Contributions can be withdrawn at any time, penalty and tax-free.
  • Generally, earnings can be withdrawn penalty and tax-free as long as you’ve held the account at least five years and are age 59½ or older.
  • Heirs also receive tax-free distributions.
  1. Flexibility
  • Access to contributions at any time, penalty and tax-free
  • No RMDs for the original owner; you never “have” to take money out
  • You can continue to contribute at any age (even after age 70) if you have earned income and meet eligibility requirements.

Remember, Roth IRA contributions are not tax-deductible and you must meet the following income limits:

  1. Single or head of household:
  • For 2018, full contribution allowed if modified adjusted gross income (MAGI) is less than $120,000 ($118,000 for 2017)
  • Partial contribution allowed if MAGI is $120,000 to $135,000 ($118,000 to $133,000 for 2017).
  1. Married, filing jointly:
  • For 2018, full contribution allowed if MAGI is less than $189,000 ($186,000 for 2017).
  • Partial contribution allowed if MAGI is $189,000 to $199,000 ($186,000 to $196,000 for 2017).
Mar 01
Love2

7 tax credits that could save you money in 2018

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Here is an article we found to be informative on all the new updated tax credits coming up. If you have any questions about how we can help you with these tax credits give us a call right away!

 

Are you looking to save money on your taxes? To maximize your tax savings, check your eligibility for tax credits. Tax credits directly reduce your tax bill, while deductions reduce your taxable income and therefore save money in proportion to your tax rate.

Refundable credits are even more valuable, since you can receive the credit even if it’s beyond the amount of taxes that you owe. Non-refundable credits are good only up to the total limit of taxes that you owe.

Look over these seven popular tax credits and see if they are likely to apply to you, either in filing this year’s or next year’s taxes.

1. Earned income tax credit (EITC)

The EITC has helped many low-income families over the years. Not only is it a refundable tax credit, it is also the only credit that can be claimed when using Form 1040EZ. To claim the EITC, you must be a U.S. citizen (or resident alien) with some earned income, a Social Security number, and investment income of less than $3,450 for the year. You can’t claim the EITC under married filing separately status.

For tax year 2017 (the taxes you will file in April 2018), EITC income limits with no qualifying children are $15,010 for single filers and $20,600 for couples filing jointly. The income limits scale with the number of qualifying children until reaching $48,340 singles/$53,930 couples at three qualifying children. Credits range from $510 with no qualifying children to $6,318 with three or more qualifying children. Income limits and credits will rise slightly for tax year 2018.

2. Child tax credit

A basic non-refundable child tax credit of up to $1,000 per child is available this tax season if your child meets the criteria in seven respects — age, relationship, support provided, dependency (claimed on your tax return), citizenship, residence time in your home for the year, and family income. The recent Tax Cuts and Jobs Act doubled the child tax credit to $2,000 through 2025 to partially offset the loss of personal exemptions. This change will be applicable to your 2018 taxes filed in April 2019.

Income phaseouts were also greatly increased through 2025 by the new tax law. They begin at a modified adjusted gross income (MAGI) of $200,000 for single filers (up from $75,000 for this tax year) and $400,000 for married filing jointly (up from $110,000).

If you don’t owe enough in taxes to claim your full Child Tax Credit, you may qualify for the refundable Additional Child Tax Credit that allows you to claim the difference up to $1,000 ($1,400 from tax year 2018 through 2025). Use IRS Form 8812 to see if you qualify.

3. Non-child dependent credit

A new $500 non-refundable credit covers dependents who don’t qualify for the child tax credit, such as children who are age 17 and above or dependents with other relationships (such as elderly parents). You can’t claim the credit for yourself (or your spouse under married filing jointly status). This credit comes into play from 2018 taxes filed in 2019 and expires after 2025.

4. Child and dependent care tax credit

The above two tax credits relate to the existence of children or dependents, while this credit relates to child-care expenses incurred so you can work or look for work. You can claim up to $3,000 in expenses for a single qualifying child/dependent and $6,000 for two or more, and the credit will cover between 20 percent and 35 percent of your allowable care expenses based on income. There is no phaseout limit.

5. Education credits

The tuition and fees deduction was eliminated in the recent tax bill, but tax credits provide another path for savings for tuition and enrollment fees at qualified institutions.

The Lifetime Learning Credit covers up to $2,000 per year as long as your MAGI is $65,000 or less for single filers and $130,000 or less for married filing jointly. The American Opportunity Tax Credit (AOTC) allows you to claim up to $2,500 per eligible student per year for up to four years as long as your MAGI is under $90,000 for single filers or $180,000 for married filing jointly. Up to 40 percent of the AOTC is refundable.

You can only claim one of the education credits for each student.

6. Retirement savings contribution credits

Also known as the Saver’s Credit, this tax credit allows a tax reduction for up to 50 percent of your contributions to an IRA or an employee-sponsored retirement plan such as a 401(k). The 50 percent credit applies up to an AGI of $18,500 for single filers and $37,000 for married filing jointly in April 2018. The credit falls to 20 percent and 10 percent of contributions at sliding AGI levels before disappearing entirely at $31,000 single/$62,000 married filing jointly.

7. Health-care premium tax credit (PTC)

Despite the claims, ObamaCare is not dead just yet. The penalty for failing to purchase health-care insurance (the individual mandate) will be gone from 2019 onwards, but the PTC still exists to make health insurance more affordable for those purchasing through the marketplace.

You may qualify for this refundable credit if your household income is less than 400 percent of the federal poverty line (FPL) for your family size. For 2017 taxes, the FPL is $11,880 for an individual and $4,140 each for additional household members.

A list of individual tax credits may be found at the IRS website — but double-check with your tax preparer for any changes or updates from the tax bill that aren’t reflected in this list.

Check your eligibility for any of these money-saving credits. As painful as it may be, you should also keep an eye on Congress for any last-minute changes to tax credits, especially those related to health care. Since 2018 is an election year, anything is possible — either positive or negative.

 

 

This article was provided by at MoneyTips & http://theweek.com/articles/750574/7-tax-credits-that-could-save-money-2018

Feb 05
Love2

Tax Cuts and Jobs Act

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January/February 2018

Dear Client:

The following is a summary of important tax developments that have occurred in the past three months that may affect you, your family, your investments, and your livelihood. Please call us for more information about any of these developments and what steps you should implement to take advantage of favorable developments and to minimize the impact of those that are unfavorable.

Major tax reform.  On December 22, President Trump signed into law the “Tax Cuts and Jobs Act” (P.L. 115-97), a sweeping tax reform law that will entirely change the tax landscape.

This comprehensive tax overhaul dramatically changes the rules governing the taxation of individual taxpayers for tax years beginning before 2026, providing new income tax rates and brackets, increasing the standard deduction, suspending personal deductions, increasing the child tax credit, limiting the state and local tax deductions, and temporarily reducing the medical expense threshold, among many other changes. The legislation also provides a new deduction for non-corporate taxpayers with qualified business income from pass-throughs.

For businesses, the legislation permanently reduces the corporate tax rate to 21%, repeals the corporate alternative minimum tax, imposes new limits on business interest deductions, and makes a number of changes involving expensing and depreciation. The legislation also makes significant changes to the tax treatment of foreign income and taxpayers, including the exemption from U.S. tax for certain foreign income and the deemed repatriation of off-shore income.

Regulations issued for electing out of new partnership audit rules. The IRS has issued final regulations on the election out of the centralized partnership audit regime rules, which are generally effective for tax years beginning after Dec. 31, 2017. Under the new audit regime, any adjustment to items of income, gain, loss, deduction, or credit of a partnership for a partnership tax year (and any partner’s distributive share thereof) generally is determined, and any tax attributable thereto is assessed and collected, at the partnership level. The applicability of any penalty, addition to tax, or additional amount which relates to an adjustment to any such item or share is also be determined at the partnership level. However, new regulations provide guidance on how eligible partnerships that are required to furnish 100 or fewer Schedules K-1 (Partner’s Share of Income, Deductions, Credits, etc.) may elect out of this new regime.

Safe Harbor Methods for Nonbusiness Casualty Losses.  The IRS provided safe harbor methods that individual taxpayers may use in determining the amount of their casualty and theft losses for their personal-use residential real property and personal belongings. Taxpayers often have difficulty determining the amount of their losses under the IRS regulations. In order to provide certainty to both taxpayers and the IRS, the safe harbor methods provide easier ways for individuals to measure the decrease in the fair market value of their personal-use residential real property following a casualty and to determine the pre-casualty or theft fair market value of personal belongings. In addition, the IRS provided a safe harbor under which individuals may use one or more cost indexes to determine the amount of loss to their homes as a result of Hurricane and Tropical Storm Harvey, Hurricane Irma and Hurricane Maria.

Deductions Denied for House Rented to Daughter–Court Case. The Ninth Circuit determined that married taxpayers weren’t entitled to claim business deductions with regard to their second house that they rented to their daughter at below-market rates. During 2008 through 2010, the taxpayers reported rental income from daughter ($24,000 for 2008, $24,000 for 2009, and $6,000 for the first three months of 2010) and claimed deductions relating to the property for, among other things, mortgage interest, taxes, insurance, and depreciation. Overall, they claimed net losses for each year of $134,360, $84,600, and $107,820. The Court determined that the daughter’s use of the house was, in effect, personal use by her parents for purposes of Code Sec. 280A(d)(1)’s limit on deductions with respect to a dwelling unit used for personal purposes. Because she didn’t pay fair market rent, they didn’t qualify for an exception to the general rule in Code Sec. 280A(e) disallowing deductions in excess of rental income.

Standard mileage rates increase for 2018. The optional mileage allowance for owned or leased autos (including vans, pickups or panel trucks) increased by 1¢ to 54.5¢ per mile for business travel after 2017. This rate can also be used by employers to provide tax-free reimbursements to employees who supply their own autos for business use, under an accountable plan, and to value personal use of certain low-cost employer-provided vehicles. The rate for using a car to get medical care increased by 1¢ to 18¢ per mile.

Damage to home’s concrete foundation can be deductible as a casualty loss. The IRS provided a safe harbor that treats certain damage resulting from deteriorating concrete foundations as a casualty loss, effective for federal income tax returns (including amended federal income tax returns) filed after Nov. 21, 2017. The safe harbor applies to any individual taxpayers who pay to repair damage to their personal residence caused by a deteriorating concrete foundation that contains the mineral pyrrhotite. The safe harbor is available if the taxpayer has obtained a written evaluation from a licensed engineer indicating that the foundation was made with defective concrete containing the mineral pyrrhotite.

For tax years beginning after Dec. 31, 2017 and before Jan. 1, 2026, the personal casualty and theft loss deduction is suspended, except for personal casualty losses incurred in a Federally-declared disaster. (Code Sec. 165(h)(5), as amended by Tax Cuts and Jobs Act Sec. 11044)

Cents-per-mile & fleet average FMV Maximums.  The 2018 inflation-adjusted maximum fair market values (FMVs) for employer-provided autos, trucks and vans, the personal use of which can be valued for fringe benefit purposes at the mileage allowance rate (54.5¢ per mile for 2018). For 2018, the FMV can’t exceed $15,600 ($15,900 in 2017) and $17,600 ($17,800 in 2017) for trucks and vans—i.e., passenger autos built on a truck chassis, including minivans and sport-utility vehicles (SUVs) built on a truck chassis. In addition, the 2018 maximum fleet-average vehicle FMVs for autos, trucks and vans for purposes of the use of the annual lease value fringe benefit valuation method for an employer with a fleet of 20 or more vehicles are $20,600 for a passenger auto ($21,100 in 2017), or $23,100 for a truck or van ($23,300 in 2017).

Taxpayer was liable for million dollar FBAR penalty–Court Case.  The Ninth Circuit found that a taxpayer willfully failed to file a Report of Foreign Bank and Foreign Accounts (FBAR) where IRS assessed a penalty of approximately $1.2 million penalty against the taxpayer for failing to disclose her financial interests in an overseas account. The Court rejected a variety of the taxpayer’s arguments, ranging from the contention that the imposition of the penalty violated the U.S. Constitution’s excessive fines, due process, and ex post facto clauses, to assertions that it was barred by statute of limitations or treaty provisions.

As you prepare to file your taxes for 2017, know that we are fully committed to preparing your tax returns accurately and completely. Our clients also have the added benefit of answers to their questions about the upcoming tax law changes and how it affects their tax situation.

We look forward to serving your tax and related needs again this season.  As your CPA, we do our best to go the mile for you and keep you informed. 

 

Sincerely,

 

John J. Heck, CPA

Laurie A. Dunne, CPA

Jan 08
Love2

IRS, Treasury Facing Challenge of Making New Tax Law Work

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IRS, Treasury Facing Challenge of Making New Tax Law Work

Now that President Donald Trump has signed the Republicans’ tax bill into law, the Treasury Department and the Internal Revenue Service are facing the monumental task of putting the law and its numerous changes to the tax code into action. The IRS’ most immediate task will be to issue guidance for employers on withholding deductions from Americans’ paychecks, with the goal of allowing taxpayers to see changes in their take-home pay by February, reports The Hill. The sweeping new code poses a “series of challenges,” Mark Everson, who served as IRS commissioner from 2003 to 2007, said, adding that it will benefit both IRS and the Treasury Department to move quickly on the new rules, to allow taxpayers to adapt with the new standards. “The [regulatory] process has got to be thorough but prompt,” said Everson, now vice chairman of alliantgroup. The law that was signed into effect on Friday includes major changes to deductions, pass-through income, and other aspects of the tax code, posing a challenge to the IRS to guide taxpayers and tax preparers through a new set of rules and regulations. Currently, withholdings are based in part on personal exemptions that have been eliminated under the new law, leaving some payroll and tax experts concerned that employees will need to fill out new W-4 forms in 2018. The IRS, though, says the guidance is going to be designed to work with the forms employees have already filed, so taxpayers will need to take no further action at this time. The new law also makes some provisions retroactive to 2017, such as a lower medical expense deduction threshold, but most of the other changes will take effect in 2018, giving the IRS a year to develop new forms and more for the tax filing season in 2019. Kathy Pickering, executive director of The Tax Institute at H&R Block, commented that the IRS will need “every bit” of that year to get the changes done.

Guidance is also needed for pass-through entities, where small businesses’ owners and partners are taxed through the individual tax code, not the corporate one. According to the new law, there is a 20 percent deduction for pass-through income, including ways to keep taxpayers from trying to reclassify wage income as business income instead. Gavin Ekins, a research economist with the Tax Foundation, said it is not going to be easy for the Treasury Department to find rules to stop such reclassification of income, marking the “biggest challenge” for the department. New regulations will also likely be required because of the changes in international tax laws, according to Eric Tolder, codirector for the Urban-Brookings Tax Policy Center, and he predicted those will be difficult to implement. Meanwhile, Republicans will now find themselves needing to ensure the IRS has the resources needed to implement the new law, just a few years after scandal broke about how the agency was handling conservative groups seeking taxexempt status. In addition, in the early part of the decade, Republicans cut the IRS’ budget, but experts think the agency will need more funding to deal with the matter. “They’re going to get a flood of calls into the call centers,” Everson told The Hill. “They’re going to need to staff up the call centers and train those people.” 7 House Way and Means Committee Chairman Kevin Brady, however, told reporters on Thursday that the assumption should not be made that Congress will be “opening up the pocketbook” to make that happen. The Texas Republican said he’s started to talk with Treasury Secretary Steven Mnuchin about implementing the new bill, and plans to meet with both Mnuchin and acting IRS Commissioner David Kautter about what resources could be needed to put the tax bill to work. “Under a new acting commissioner, if they can make that case in conjunction with Treasury, we’ll listen,” he said.

Jan 08
Love2

Tax News Americans Flock to Advisers to Take Advantage of New Law

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Speaker of the House Paul Ryan, R-Wis., speaks after the House passed the Republican tax bill. Republican lawmakers said they wanted to simplify the tax code so you could file your return on a postcard. It turns out the new 500-page tax law will be anything but simple for many affluent Americans, who are now inundating their accountants for advice. What Happens Next, Month by Month President Donald Trump signed into law the sprawling tax bill that was hastily built out by Republican leaders over the past month. In doing so, he formalized a huge range of changes to how Americans — and Much of the detail of the law will be established after the IRS releases new regulations stemming from the changes that Congress made — a rolling set of updates that will come over the next year. Without further ado: What to expect from the changes to the tax code.

Jan. 1, 2018  The new law comes into effect — but the effects won’t be felt immediately. Talking to tax advisers early in the year to plan for how the new law affects you is the motto of the day. For example, it may be worth it for some people who earn certain types of income to become independent contractors, allowing them to take a 20 percent deduction on that income. But, again: Talk to someone who does this for a living. Among the changes that begin in January are an expansion of what are known as “529” plans. These were formerly reserved for saving money for college, but the new law expands their use to include paying for K-12 education as well. This will mostly benefit wealthier individuals whose kids attend private schools, but, if that’s you, take advantage. If you’re looking to buy or refinance a house, be aware that the mortgage interest deduction will be capped at $750,000 as of the first of the year instead of $1 million. If you are planning on buying a new house or refinancing, doing so after Jan. 1 will mean different considerations in doing so. Another change is the increase in the threshold for the estate tax. If you are a wealthy person who dies on Dec. 31, more of your estate can be taxed than if you die the next day. Take that into account when you are thinking about when you plan to die. As of the first of the year, businesses will start seeing lower tax rates. The grand theory behind the Republican plan is that this benefit will trickle down to everyone else in the form of new jobs and higher wages. Some stockholders will likely see benefits right out of the gates, as companies buy back stock.

February 2018  In February, the IRS will publish new tax rates. (For individual taxpayers, there are a range of brackets that determine how much is paid. For businesses, it’s much simpler.) As it stands, your paycheck withholds a certain amount of money to pay your federal taxes. On Jan. 1, the amount that’s withheld will likely be too high, since most people are getting a tax cut beginning next year. But we won’t know until February — when the IRS releases the new rates — how much you’re overpaying. (You’ll get those overpayments back after you file in 2019.) The upshot is that, once the IRS publishes the new rates, you’ll have less taken out of your paycheck in taxes.

April 2018   Filing your taxes Not much will be different than when you filed this year, since you’re paying on your 2017 earnings. If you did pay more on your medical bills, though, this is where you’d see that deduction kick in.

Before the end of 2018 Alimony payments.

Currently alimony is deductible by the payer and income to the recipient. The Act would retain that treatment for divorce agreements completed through 2018. For divorce agreements entered into after December 31, 2018, or preexisting agreements that are modified after that date to include this provision, alimony would no longer be deductible by the payer and would not be includable in income to the recipient. Jan. 1, 2019 The Obamacare individual mandate ends, meaning that the requirement that you either have insurance coverage or pay a fine goes away. You may now simply not have medical insurance as you desire and not have to pay extra on your taxes.

April 2019  Filing your taxes  You’ll get more money back after filing your taxes this year, thanks to your overpayment in January and February of 2018. The alternative minimum tax also goes up for this filing. 2026 The individual tax cuts expire, unless renewed by Congress.

Jan 02
Love2

Steven Sims Chosen as Superintendent of Valley Forge National Historical Park, Hopewell Furnace National Historic Site

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PHILADELPHIA – National Park Service (NPS) Acting Northeast Regional Director Cynthia MacLeod has named Steven Sims as the new superintendent of Valley Forge National Historical Park and Hopewell Furnace National Historic Site in Pennsylvania. Currently serving as Northeast Region’s chief of facility management, Sims will begin his new assignment in late June. He replaces Kate Hammond, who was named Intermountain Region deputy regional director last October after serving as superintendent since March of 20

“Steve brings a broad set of skills that will be very beneficial to both the park units. He is skilled at bringing partners together to work towards a common goal and values the importance of community engagement,” said MacLeod. “His background as a West Point graduate and military officer will provide the valuable leadership that is needed to define and carry out the mission of the parks.”
“I am honored to have been selected to serve as the superintendent of Valley Forge National Historical Park and Hopewell Furnace National Historic Site,” said Sims. “As a former Army Officer, I feel a deep responsibility for the privilege of caring for the hallowed grounds of Valley Forge where, unarguably, the spirit of the American soldier was born. Hopewell Furnace National Historic Site is also a relatively unknown gem that provides a fantastic look at 19th Century iron plantation industrial culture. I look forward to this opportunity to serve these parks and our neighbors in this new role.”

During his 20-year federal career, Sims has served as the facility manager for Independence National Historical Park and was the civil engineer and facility manager for the National Mall and Memorial Parks in Washington DC from 2007 until 2011. Prior to working for the NPS, he served as a consultant engineer for Alpha Corporation and an Army engineer officer. He is a registered professional engineer, a certified facility manager and a project management professional. He holds a bachelor’s degree in Civil Engineering from the United States Military Academy, a master’s degree in Engineering Management from the University of Missouri and a master’s in Business Administration from Norwich University.

Sims is originally from Tehachapi, CA. He is married and has two teenage children. His hobbies include hiking, fly fishing, beekeeping and riding motorcycles.

 

 

Article from:

https://www.nps.gov/vafo/learn/news/simssuperintendent.htm

Jan 02
Love3

Valley Forge Tourism & Convention Board

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We are located right next to the park and love the change landscapes that Valley Forge offers with every season change.

 

Park Receives $54,000 Contribution from the Valley Forge Tourism & Convention Board

KING OF PRUSSIA, PA – Today, the Valley Forge Tourism & Convention Board (VFTCB) presented Valley Forge National Historical Park with a $54,000 contribution to support ongoing improvements and future enhancements to the visitor experience in the park. The contribution is comprised entirely of proceeds from the 12th Annual Revolutionary 5-Mile Run® (Rev Run) and represents the largest-ever donation to the park during the 12-year history of the Rev Run.

“We’re honored to receive this significant contribution and we consider ourselves fortunate to have a committed park partner like we have in the Valley Forge Tourism & Convention Board,” said Superintendent Steve Sims. “As a two-time Rev Run participant, I look forward to utilizing this contribution to enhance the visitor experience within the park and also to seeing the race continue for years to come.”

“Valley Forge National Historical Park is one of the region’s most visited destinations and we are thrilled to present our largest-ever donation to help support key programming and improvement projects in the Park with funds from this year’s Rev Run,” said Mike Bowman, president and CEO, Valley Forge Tourism & Convention Board.

The $54,000 contribution will support five programs and projects in the park, including Historic Philadelphia Inc.’s “Once Upon a Nation” storytelling program, the design and fabrication of trailhead and overlook improvements for the Grand Parade trail system, new plantings and improvements for the garden entrance to the Visitor Center, a sustaining fund for future maintenance of Sullivan’s Bridge, and new information panels along the trail from the Visitor Center parking lot.

The VFTCB presented the contribution to Superintendent Steve Sims alongside elected officials, past partners and sponsors of the Rev Run, members of the Valley Forge Park Alliance and special guests under the National Memorial Arch located near the intersection of North Outer Line Drive and Gulph Road.

For additional information please contact us at Valley Forge National Historical Park, 1400 North Outer Line Drive, King of Prussia, Pennsylvania 19406 or e-mail us at vafo_superintendent@nps.gov

 

Article from

https://www.nps.gov/vafo/learn/news/valley-forge-tcb-contribution-to-park.htm

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