Before 2018, paying alimony was deductible from your taxes, while receiving it was taxed at 15%.
But the new 2018 tax law switches that around: according to its provision, as of 2019 you can’t deduct the alimony you pay from your taxes, but you don’t pay taxes on the alimony you receive.
The new rule means the government will end up with much more alimony money switching hands than it does before – and significantly changes the economics of divorce. Whether that means a rush to the courthouse will have to be seen. But if it does … talk about unintended consequences!
If your financial life is complicated, you need someone on your side. Contact a Tax Ninja for a consultation.
A new report from Citigroup estimates that homeowners in states with hot real estate markets like California, New York, and Connecticut will see their tax bills go up by an average of $3,000.
That’s because homeowners will no longer be able to deduct the full amount of state taxes they pay on their homes from their federal taxes, so that while buying a home might not be any more expensive, owning it will be. There are also new caps on mortgage deductions.
The tax plan raises the basic deduction for every individual taxpayer by over $5,000, but that amount could be dwarfed by the property tax deductions people in expensive states are now losing.
The more invested you are in your home, the more you could get hit.
If you own real estate, you need to optimize your taxes. You need a Tax Ninja now more than ever.
Contact us for a consultation.
Now that homeowners can’t deduct their full state property taxes from their federal income taxes, the cost of owning and maintaining a home could rise significantly. A new report from NPR suggests that those costs will ultimately be paid by tenants, with landlords raising rents across the country – especially at the lower end of the rental market.
That could get even worse, NPR suggests, if the new lower tax rates also make the Low Income Housing Tax Credits that developers get if they construct affordable homes less attractive.
More expenses for landlords combined with fewer new affordable units could create a significant crunch on renters.
It’s more important than ever to take advantage of the new tax bill and lock in your savings. Contact Tax Ninja for a consultation.
For those who can afford it, 2018 could be a much better time to get sick than 2016 was.
That’s because the 2018 tax law lowers the threshold past which you can deduct medical expenses from 10% of your Adjusted Gross Income to 7.5% – and it makes this reduction retroactive to 2017.
That means that, if you do happen to have significant medical expenses, your ability to claim them as a tax write-off will kick in sooner – and maybe you should take another look at your 2017 medical expenses.
Need help with that? Contact Tax Ninja for a consultation.
Much of the reporting on the new Republican tax plan emphasizes how much money it will save businesses. But it could also put a dent in a traditional business practice: business meetings on the golf course.
The new tax law eliminates a 50 percent deduction for business-related expenses that include concerts, sporting events, and golf.
“I doubt it will impact the high-end of the business world like guys playing at Augusta or Pine Valley, but it will definitely cause more scrutiny of corporate outings and probably force people who mix golf and business to better justify a day outside,” Blue Heron Research Partners CEO David Rynecki said, according to Golf Magazine. “Consider that you just saw the cost of [business] golf double.”
It’s just one of the many unpredictable changes to the way money flows through the economy caused by a tax bill that was passed before it could be adequately studied.
How will the 2018 tax law impact you?
Contact Tax Ninja for a consultation to find out.
That depends. Do you earn money through your own:
- Sole Proprietorship?
- S Corporation?
If you do, that income may be eligible for a 20% deduction right off the top, before it even reaches your personal income taxes.
If you qualify, we can help you do that. Contact Tax Ninja for a consultation.
The new 2018 tax law is being hyped by politicians as a tax cut for all America, but how will the cuts actually be distributed?
The truth is that it will depend on the kind of year people have and how the economy’s doing. But in the meantime, Politifact has been running the new law against current economic forecasts, and come up with the following results:
- 80% of Americans will see some kind of tax cut in 2018
- For about 40% of households on the lower end of the income spectrum, the cuts will average $480 or less
- The richer 60% of households will see cuts ranging from $1,090 to $285,490 (for the very top earners)
But your personal results will depend significantly on where you live, whether you own property, what kind of deductions you’ve taken – frankly there isn’t really a “typical” case for people with interesting or complicated financial lives.
How will the new tax law affect you? Tax Ninja can help you find out, prepare, and save money.
Contact us for a consultation.
It’s been a constant thorn in the side of tax reformers – couples filing jointly would often end up in a higher tax bracket than they would have if they filed alone.
However, the new tax law’s tax thresholds for joint filings are exactly double that of filing individually (except in the two highest brackets)– meaning there’s no penalty for most taxpayers.
Isn’t love grand?
Find out how the 2018 tax law will change your financial life.
Contact Tax Ninja for a consultation
The 2018 tax law changes the way the IRS calculates inflation.
We promise we’ll keep this from getting complicated.
The way most economists calculate inflation is through the Consumer Prince Index for urban consumers (the CPI-U), which tracks the prices of goods and services that most people use.
The 2018 tax law has the IRS using the “Chained Consumer Price Index.” Basically that’s the same thing, except that it assumes that if something gets too expensive, consumers will switch to a cheaper alternative.
So inflation under the new way the IRS tracks it (the “Chained CPI”) will increase more slowly than the way they were tracking it before.
Which is more accurate? Honestly we don’t want to argue about it. What we want to do is figure out what this will do to your taxes, and how you can use it to save the most money.
Let’s do that. Contact Tax Ninja for a consultation.
Political observers were surprised when the 2018 Republican tax law kept incentives for renewable energy sources, including a $7,500 tax credit for people who purchase electric cars.
But if you want the best selling models of those cars and are counting on the tax credit, better buy them soon.
That’s because the tax incentive vanishes after a manufacturer has sold over 200,000 electric cars, and Tesla and General Motors are both expected to hit that threshold this year, meaning that the government incentive to purchase their vehicles – the most popular in the class – would vanish.
The 2018 tax law has a lot of idiosyncrasies, and they can mean thousands of dollars to you. Find out everything you need to know to save money. Contact Tax Ninja for a consultation.