Many strategies to reduce your 2017 tax liability will expire on 12/31/17. It is crucial to review your tax situation prior to the end of the year and implement any potential tax savings measures while you still have the ability to do so.  As a business owner there are a myriad of potential planning strategies available. Below are a few of the most common.

• Defer taxable income and accelerate business deductions.
• Take advantage of generous depreciation deductions, including the potential “Heavy SUV deduction” for trucks or SUVs weighing over 6,000 pounds.
• There are many different qualified retirement plans to choose from and they all (with the exception of a SEP IRA) have to be established by 12/31/17 if you want to make a contribution for the current year. A SOLO 401(k) is often the best choice if you are the only employee (or you and your spouse are the only employees) in your business and you want to maximize your annual contributions.
• Ensure that you have enough tax paid in to avoid penalty on your 2017 tax return. To avoid a penalty on your 2017 return you need to have at least 90% of your 2017 tax liability paid in by year end. If you are not sure what your tax liability will be the alternative approach is to pay in 100% (110% if your AGI is greater than $150,000) of your 2016 liability.
• Reminders for Georgia companies: Renew your county business license by year end, issue 1099’s and W-2’s by January 31st, file your corporate or partnership return by March 15th, renew your LLC or Corporation by April 1st, and file your business personal property tax return by April 1st. Now is a good time to make sure that your 2017 bookkeeping is almost complete!
• Speaking of bookkeeping: If you are looking to sign up for Quickbook’s new (and very good) online version of their software, we are happy to offer all business clients our 50% wholesale pricing discount. Just let us know BEFORE you sign up so that we can get you locked in at the discounted rate.

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We have also posted a Year End Tax Planning For Individuals article that you can review in conjunction with this article.

This is general information and a brief summarization of complicated tax issues which are often subject to many exclusions and limitations. We make every effort to verify the accuracy of all information but we do not guarantee or warranty advice disseminated over the internet. Please give us a call to discuss potential strategies and ensure they make sense for your specific situation.

​Many strategies to reduce your 2017 tax liability will expire on 12/31/17. It is crucial to review your tax situation prior to the end of the year and implement any potential tax savings measures while you still have the ability to do so. Below are a few of the most common individual planning opportunities.

• If you expect to be in the same or lower tax bracket next year consider accelerating deductions into 2017 and/or deferring receipt of taxable income. If you expect to be in a higher tax bracket you may benefit from doing the reverse.
• Increase your charitable donations prior to year-end. Any donations made before 12/31/17 will be deductible on your 2017 return. (This is especially true IF the charitable donation deduction is eliminated for 2018.)
• Related to charitable donations, if you are planning on making a substantial gift you may want to donate appreciated stock.  The benefit is two-fold; you will get a deduction for the full market value of the stock AND you don’t have to pay capital gains tax on any unrealized gain. 
• Consider contributing to retirement accounts. 401(k) accounts are eligible for employee deferrals of up to $18,000 (plus a bonus $6,000 catch-up contribution if you are over 50) and must be deferred from your paycheck before 12/31/17. (IRA contributions can be made up until 04/15/18.)
• If you are eligible for an HSA account consider contributing to it as well.
• Harvest portfolio gains and/or losses. If you have gains in your portfolio, are eligible for the 0% capital gains rate, and expect to be subject to the higher capital gains rates in the future, you may want to sell now. Then repurchase the securities you want to keep and increase your cost basis to the new purchase price. If you have securities that are worth less than you paid for them and you are ready to reinvest the money elsewhere you may want to go ahead and sell.  “Harvesting” the capital loss before year end will allow you to offset the loss against any taxable capital gains in your portfolio. If you do harvest losses make sure that you are aware of the “wash sale” rules and wait at least 30 days if you are going to repurchase a substantially identical security.  (The wash sale rule does not apply to harvesting gains.)
• Use your Flex Plan at work. It is a “use it or lose it” account. You must use it by 12/31/17 unless your plan allows for the optional two and a half month carryover or $500 carryover provisions.
• Low to moderate income earners can take advantage of the expanded Saver’s Credit.
• Consider converting a Traditional IRA to a ROTH IRA. You will pay tax in the year of conversion but all future growth will be tax free.

We have also recently posted a Year End Business Tax Planning article if you are either self-employed or a small business owner. 

This is general information and a brief summarization of complicated tax issues which are often subject to many exclusions and limitations. We make every effort to verify the accuracy of all information but we do not guarantee or warranty advice disseminated over the internet. Please give us a call to discuss potential strategies and ensure they make sense for your specific situation.

​If you are a Georgia resident you may be interested in the popular GA GOAL or GA 529 tax benefits.  The GA GOAL scholarship program allows taxpayers up to a $2,500 credit for contributions to the program.  The Path2College Georgia 529 Plan allows a deduction of up to $2,000 ($4,000 for joint filers) per year, per beneficiary.  See the links below for more details.

http://www.goalscholarship.org/
https://www.path2college529.com/

Georgia taxpayers getting close to age 62 may be pleasantly surprised to find out that their state income tax liability can be significantly reduced in retirement. The Georgia Retirement Income Exclusion applies to many forms of retirement income and reduces total Georgia liability to $0 for many retirees.

https://dor.georgia.gov/retirement-income-exclusion​

This is general information and a brief summarization of complicated tax issues which are often subject to many exclusions and limitations. We make every effort to verify the accuracy of all information but we do not guarantee or warranty advice disseminated over the internet. Please give us a call to discuss potential strategies and ensure they make sense for your specific situation.

The Senate passed their version of the tax bill late Friday night. If you missed the details of the bill, below are some of the major differences with the House bill that passed last month.

(And if you missed the update on the House Tax Bill Proposal, click here to read that one first.)
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The main things that stand out to me with the Senate bill is the different treatment of flow through businesses (think S-Corps and partnerships), the retention of the AMT, and the addition of Obamacare mandate repeal.

We'll see what actually comes out of the House and Senate reconciliation process before we dig too deep into the details but, as others have said, this bill is more about tax cuts than tax reform and very different from the last tax reform bill delivered by the Reagan administration in 1986.

There are some very good things in the bill(s), and some simplifications, but overall this is written to be a major tax cut (especially to corporate rates) and written, first and foremost, in an attempt to drive the economy forward.

The administration would like to have a bill signed by Christmas, and at this point it's hard to see a way the GOP won't come up with some agreement between the two bills.

Please feel free to reach out if you have any specific questions or concerns about how the final bill may relate to your personal tax situation.
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This is general information and a brief summarization of complicated tax issues which are often subject to many exclusions and limitations. We make every effort to verify the accuracy of all information but we do not guarantee or warranty advice disseminated over the internet. Please give us a call to discuss potential strategies and ensure they make sense for your specific situation.

In the current version of the proposed bill, there are major points that, as usual, some will love, and some will hate. The bill originated in the House of Representatives and it’s just the first draft. It is important to remember that the proposed legislation will be sent to committee for debate as they consider changes and revision. House members are confident that their version will be revised and pass fairly quickly. The Senate will then need to write their own version of the bill. It is expected that the Senate bill will be similar to the version in the House, but may experience more difficulty getting passed. If both the House and Senate pass their versions of the bill, they will work together to reconcile the bill before final passage into law.
 
That said, let’s review some of the major points of the current House bill:

* Individual tax brackets go from 7 to 4
 
* The Standard Deduction is nearly doubled, BUT
 
* Personal Exemptions are ELIMINATED. This offsets some of the advantage of the increased standard deduction, BUT
 
* Certain credits are increased (enhanced child tax credit & a new credit for non-child dependents), somewhat offsetting the disadvantage to families losing multiple personal exemptions.
 
* Many itemized deductions are ELIMINATED
 
* The AMT is ELIMINATED (It’s about time!)
 
* The Student loan interest deduction is ELIMINATED
 
* The Educator expense deduction is ELIMINATED
 
* Alimony tax treatment is changed
 
* The Primary Residence Gain Exclusion is significantly
LIMITED
 
* Corporate tax rates are REDUCED significantly
 
* Pass through (think S-Corps and Partnerships) tax rates are REDUCED on SOME shareholders – (This one is a partial reduction for some shareholders in certain industries. It is likely to change significantly before passage.)
 
* Potentially Retroactive - (There have been calls for making the bill retroactive to 01/01/17 but recent remarks by the administration make this seem unlikely.)
 
These are highlights of a 400+ page bill and it’s obviously not intended to be a full review. Expect major changes if it becomes law. We’ll keep an eye on the bill as it works its way through Congress.
 
Please feel free to reach out if you have any specific questions or concerns about how the bill may relate to your personal tax situation.

This is general information and a brief summarization of complicated tax issues which are often subject to many exclusions and limitations. We make every effort to verify the accuracy of all information but we do not guarantee or warranty advice disseminated over the internet. Please give us a call to discuss potential strategies and ensure they make sense for your specific situation.