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.
The 2018 tax law has good news and bad news for charities and people who like to donate to them.
The good news is that the new tax law raises the limit on the amount of charitable donations that can be deducted in a year by 10%. It used to be 50% of your adjusted gross income, and now it’s 60%.
The bad news is that charitable deductions only kick in as a tax break if your itemized deductions exceed the standard deduction – which is now significantly larger. So while people who give lots of money to charities, big donors, will have a new incentive to keep giving, people who give small or medium sized donations might no longer get a tax break on those contributions at all. They’d end up paying the same amount in their taxes with or without giving charitable contribution.
So if people are giving for the tax break, there could be a spike in big gifts, but we could expect a significant drop in small ones.
Find out how the new tax law affects you. Contact a Tax Ninja for a consultation.
The new tax law does not cut graduate school tuition deductions or the deduction for teachers buying school supplies, as many had feared. But a number of individual itemized deductions are going away in 2018. Here’s a partial list:
- Personal exemptions – you used to get $4,500 off of your taxes for you and every dependent. Now that’s gone.
- Moving expense deductions (except for active military personnel)
- Home equity loan interest
- Professional license and regulatory fees
- Parking and transit reimbursement from your employer
- Required medical tests for a job
- Continuing professional education
- Tax preparation fees
- Investment fees
- Alimony deductions (though that doesn’t phase in until 2019)
And of course State and Local Taxes (SALT) deductions are now capped at $10,000.
Some of these changes could have significant social impact over time. To see how they impact you, and how you can save as much money on your taxes as possible, contact Tax Ninja for a consultation.
Yes and no. Technically the new Republican tax law does not repeal the individual mandate, that’s still the law of the land. But it does eliminate the penalty for not following the law, so in practice people can ignore it with no consequences. If found guilty of violating it, they’d pay a whopping $0.
Is that in fact “repeal?” That’s up to you to decide. What we do is figure out the practical impact of the tax law on your financial life, so we can save you money.