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Insights & Perspective

Year-end tax and financial to-do list for individuals

With 2019 arriving here soon, there are several tax and financial to-dos you should address before 2018 ends. For example: Incur qualifying health care Flexible Spending Account expenses by Dec. 31 to use up these funds or you’ll potentially lose them. Also, max out contributions to retirement plans. Or, if applicable, take required minimum distributions […]

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Deductibility of year-end charitable gifts

With tax law changes going into effect in 2018 and many rules applying to the charitable deduction, it’s a good idea to check deductibility before making year-end donations. First, total up your potential itemized deductions for the year, including the donations you’re considering. The total must exceed your standard deduction (which has been nearly doubled […]

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Does prepaying property taxes make sense anymore?

Prepaying property taxes has been a popular year-end tax-planning strategy. But does it still make sense? For many, particularly those in high-tax states, it doesn’t. The TCJA made two changes that affect this strategy: 1) nearly doubling the standard deduction, so fewer taxpayers will itemize, and 2) putting a $10,000 cap on state and local […]

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Catch-up retirement plan contributions

If you’re an executive or other key employee, your employer may offer you a nonqualified deferred compensation (NQDC) plan, which pays you in the future for services currently performed and allows deferral of income tax. But NQDC plans must meet many requirements. One is that, if you wish to defer part of your 2019 compensation, […]

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Mutual funds: Handle with care at year end

As we approach the end of 2018, it’s a good idea to review the mutual fund holdings in your taxable accounts and take steps to avoid potential tax traps. For example, near year end, funds typically distribute net realized capital gains to investors. These gains will be taxable to you regardless of whether received in […]

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Time for NQDC plan deferral elections

If you’re an executive or other key employee, your employer may offer you a nonqualified deferred compensation (NQDC) plan, which pays you in the future for services currently performed and allows deferral of income tax. But NQDC plans must meet many requirements. One is that, if you wish to defer part of your 2019 compensation, […]

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Donate appreciated stock for twice the tax benefits

Did you know that you may be able to enjoy two tax benefits if you donate long-term appreciated stock instead of cash? First, if you itemize, you can claim a charitable deduction equal to the stock’s fair market value. Second, you can avoid the capital gains tax you’d pay if you sold the stock. But […]

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Could “bunching” medical expenses save you tax?

Some of your medical expenses may be tax deductible, but only if you itemize deductions and have enough expenses to exceed the applicable floor for deductibility. With proper planning, you may be able to time controllable medical expenses to your tax advantage. The Tax Cuts and Jobs Act (TCJA) could make bunching such expenses into […]

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Consider all the tax consequences before making gifts to loved ones

Because of the high exemption under the TCJA, few Americans have to worry about facing federal gift and estate tax liability in the next several years. But no matter your current net worth, it’s still important to be tax-smart when making lifetime gifts. About the Author Latest Posts Contact AuthorAbout James B. ReynoldsJim became a […]

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529 plans offer two tax-advantaged education funding options

When it comes to funding education expenses with a 529 plan, both prepaid tuition plans and savings plans offer attractive benefits. Which one is right for you? About the Author Latest Posts Contact AuthorAbout James B. ReynoldsJim became a partner in 1991 and managing partner July 1, 2015. He serves as the manager of the […]

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Charitable IRA rollovers may be especially beneficial in 2018

With the TCJA’s near doubling of the standard deduction, making a direct charitable IRA rollover can be particularly powerful for taxpayers old enough to be eligible. About the Author Latest Posts Contact AuthorAbout James B. ReynoldsJim became a partner in 1991 and managing partner July 1, 2015. He serves as the manager of the Firm’s […]

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Tax planning for investments gets more complicated

With more tax rate thresholds to keep in mind, year-end tax planning for investments is especially complicated in 2018. Find out what your rate might be for short- and long-term capital gains, dividends (whether qualified or not) and the NIIT About the Author Latest Posts Contact AuthorAbout James B. ReynoldsJim became a partner in 1991 […]

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The tax deduction ins and outs of donating artwork to charity

Donating artwork is a great way to share enjoyment of the work with others. But to maximize the tax benefit, too, you must plan your gift carefully and follow all the rules. About the Author Latest Posts Contact AuthorAbout James B. ReynoldsJim became a partner in 1991 and managing partner July 1, 2015. He serves […]

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You might save tax if your vacation home qualifies as a rental property

For owners of vacation homes, now is a good time to review year-to-date rental vs. personal use of the home. Adjusting use between now and year end might be beneficial. Here’s why. About the Author Latest Posts Contact AuthorAbout James B. ReynoldsJim became a partner in 1991 and managing partner July 1, 2015. He serves […]

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Do you need to make an estimated tax payment by September 17?

Two of the 2018 estimated tax payment deadlines for individuals have already passed; the third one is coming up very soon. Here’s how to determine if you need to make a payment. About the Author Latest Posts Contact AuthorAbout James B. ReynoldsJim became a partner in 1991 and managing partner July 1, 2015. He serves […]

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Back-to-school time means a tax break for teachers

When elementary and secondary school teachers are setting up their classrooms for the new school year, it’s common for them to pay for some classroom supplies out of pocket. A special tax break allows these educators to take an above-the-line deduction for up to $250 of these expenses. The deduction is especially important now due […]

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Play your tax cards right with gambling wins and losses

If you gamble, play your tax cards right with your wins and losses. Changes under the TCJA could have an impact. You must report 100% of your winnings as taxable income, but you might pay a lower rate on them because of TCJA rate reductions. Gambling losses are still allowed as an itemized deduction (up […]

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Keep an eye out for extenders legislation

The pieces of tax legislation garnering the most attention these days are the Tax Cuts and Jobs Act signed into law last December and the possible “Tax Reform 2.0” that Congress might pass this fall. But what happens with “extenders” legislation is also important. It affects whether the above-the-line deduction for tuition and related expenses, […]

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The TCJA prohibits undoing 2018 Roth IRA conversions, but 2017 conversions are still eligible

Converting a traditional IRA to a Roth IRA can provide tax-free growth and tax-free withdrawals in retirement. But conversions are subject to income tax. Before the TCJA, if you discovered a conversion would be too costly tax-wise, you could undo it using a “recharacterization” and avoid the tax hit. Effective with 2018 conversions, the TCJA […]

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Do you still need to worry about the AMT?

The alternative minimum tax (AMT) has long been a worry to many individual taxpayers. Learn how TCJA changes might affect your AMT risk, and see our AMT planning tips About the Author Latest Posts Contact AuthorAbout James B. ReynoldsJim became a partner in 1991 and managing partner July 1, 2015. He serves as the manager […]

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Why the “kiddie tax” is more dangerous than ever

If you’re considering making a gift of income-producing or appreciated assets to a minor or a college student, beware of the big, bad kiddie tax. It’s fiercer under the TCJA. About the Author Latest Posts Contact AuthorAbout James B. ReynoldsJim became a partner in 1991 and managing partner July 1, 2015. He serves as the […]

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New Tax Act and Mortgage Interest Deductions – What Changed?

Dear Clients and Friends: We are writing to let you know about changes in the rules for deducting qualified residential interest, i.e., interest on your home mortgage, under the Tax Cuts and Jobs Act (the Act). Under the pre-Act rules, you could deduct interest on up to a total of $1 million of mortgage debt […]

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New 20% deduction for “qualified business income”

Dear Clients and Friends: We are writing to inform you of a significant new tax deduction taking effect in 2018 under the new tax law. It should provide a substantial tax benefit to individuals with “qualified business income” from a partnership, S corporation, LLC, or sole proprietorship. This income is sometimes referred to as “pass-through” […]

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Thank You

We would like to use this space to thank our clients and friends for the opportunity to have served them during this past year. Whether called upon to provide accounting, auditing or tax services, business or personal financial planning or perhaps just to listen, we will always do our best to provide quality service. We […]

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Tax Reform

The President’s Advisory Panel on Federal Tax Reform has finally issued its report and, surprisingly, found the current tax system to be flawed and in need of some tinkering. We asked the leading Republican Presidential candidate, Donald Trump, for his thoughts on reforming our our current income tax code. The Duck’s response: About the Author […]

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Magic: Social Security Benefits

How do you know if your Social Security benefits are taxable? The answer requires MAGIC — (the Modified Adjusted Gross Income Calculation). The “magic” number, generally, is your adjusted gross income (excluding your social security benefits) plus About the Author Latest Posts Contact AuthorAbout Tom O’BrienThomas S. O’Brien, CPA, Of Counsel and now retired, is […]

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Happy Holidays

That you are now reading this letter means that you have opened our package and have noticed our Annual Tax Organizer.  While you may have a tremendous urge to complete it immediately, we suggest you concentrate initially on the first question posed to you – What is your filing status?  Our heroes in Congress and […]

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Qualifying What?

As you know, we have lobbied extensively over the years for simplification of the Internal Revenue Code, Congress responded several years ago with the Working Families Tax Relief Act (orWFTRA to those of you with unique tongue structure). The Act attempted to simplify the definition of a dependent child (to our knowledge, no occupants of […]

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Education is Taxing

Remember years ago when there were no tax breaks for tuition and other college expenses? Today the education arena is one of the most complicated due to the credits, exclusions and deductions that are available. While a doctorate in taxation is not required, it might be useful in understanding some of the recent tax law […]

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What?!?

As you know, our firm has lobbied extensively for simplification of the Internal Revenue Code. It now appears that our efforts may come to fruition. Congress passed the Working Families Tax Relief Act of 2004 (or WFTRA to those of you with unique tongue structure). The new law attempts to amend Section 152 of the IRC by […]

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Still Deceased?

Several months ago, we wrote about a request from the IRS to one of our deceased clients for an income tax return along with the related taxes. Since our client had passed about three years ago, we questioned the methods being used by the IRS in raising revenue from the departed. In response to our letter alerting the IRS […]

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R.I.P.

In an effort to generate revenue from any source, the Internal Revenue Service continues to solicit funds from those no longer able to pay. We recently received a copy of a letter from the IRS requesting a 2002 income tax return from a client who had previously passed away. That the word “Deceased” appeared after […]

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Our Paperless Society

The Paperwork Reduction Act of 1980 may not be working. Just this past year, our representatives in Congress passed three bills totaling 3,632 pages, about 3,600 more than the laws established in the 1914 Federal Trade Commission and the 1935 Social Security Act. In looking for new taxes to pay for the recently-issued health bill, […]

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Recess

As we write this, our 535 delinquents in Congress are now on recess, extolling their accomplishments to their constituents. After the election, the lame ducks will hopefully remember what they had forgotten to do before going on recess. When Congress does return to do whatever it Is they do, they need to do something about the estate tax. As […]

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Plain English?

We recently alerted our clients to an interesting development. On October 13, 2010, the President signed Public Law 111-274, the short title of which the “Plain Writing Act of 2010”. The Act requires the federal government to begin using “plain writing” by October 13, 2011. The language used in the Act itself is not, apparently, […]

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Tax Reform

The President’s Advisory Panel on Federal Tax Reform has finally issued its report, and surprisingly, found the current tax system to be flawed and in need of some tinkering. As part of our civic duty to assist the panel, we suggested that the IRS make an increased effort to comply with the Paperwork Reduction Act by eliminating the […]

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Used Socks

With the deadline for 2006 tax-deductible charitable contributions approaching, we recently alerted many of our clients and friends about a change in the Internal Revenue Code. Because of the wide-ranging effect of this change, we feel compelled to bring it to the attention of the general public. A few months ago, Congress passed another new tax law, known as […]

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Simplification at Work

The Wall Street Journal recently reported that the IRS”s “Office of Taxpayer Burden Reduction” (more popularly known to you as TBR) is in search of recommendations on how to reduce “taxpayer burden”, meaning the amount of time and money taxpayers have to spend to comply with federal tax obligations. Of course, if you want to provide some recommendations, […]

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$400 Billion

The Internal Revenue Service is claiming that it is not collecting some $400 billion a year in income taxes, The Service blames a lot of this on the so-called underground economy. We believe it unfair to arbitrarily single out a certain group of people for this problem just because they ride the subway. As proof, we point out that tax revenues […]

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Happy Birthday!

Were you 65 years old at the end of 2003? If you did not itemize your deductions, you were entitled to as much as an additional $1,150 in your standard deduction. Suppose you did not turn 65 until January 1, 2004. No problem – you were still 65 last year. The Internal Revenue Service considers you to turn […]

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Rolaids, Please!

As you know, Congress recently passed the Jobs & Growth Tax Relief Reconciliation A.ct of 2003. The word “Simplification” does not appear in the title and is not an oversight. One of the areas of ”relief” in the new tax law relates to capital gains. The new maximum capital gain tax rates (only ten of them now • 5%, 75%, […]

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