As I am sure you have heard, Congress passed and the President signed into law the biggest federal tax reform bill since 1986. One of the new provisions you might be able to take advantage of is what the definition of a “child” is. Under the Tax Cuts and Jobs Act of 2017, the Child Tax Credit was increased from $1,000 to $2,000, of which $1,400 is actually refundable (meaning if your taxes get reduced before withholding to zero, up to $1,400 per child can be refunded to you). At the same time, the personal exemptions, a deduction of $4,150 per dependent (plus taxpayer and/or spouse) were repealed. At the same time a $500 “dependent” tax credit (usually called a family credit) is allowed for each “Qualifying Dependent” on the tax return (partially making up for the loss of personal exemptions.) (Simple, huh?) Now, the definition of a “Qualifying Dependent” is any dependent who is not a “Qualifying Child”, while any “Qualifying Child” is defined on the 1097 page Reconciliation Agreement that ended up becoming the bill signed by the president as anyone that qualifies for the Child Tax Credit, meaning a child under 17 that qualifies as your dependent. [...]
Tax Musings of a Burbank CPA: Important 2018 IRS Dates
Well, welcome to 2018. The IRS has finally released important dates for filing of 2017 tax returns as follows: 1. IRS will accept e-filed returns on January 29, 2018. 2. Forms W2 and 1099-MISC with box 7 filled out need to be filed with the government by January 31, 2018 3. IRS will begin releasing individual returns with Earned Income Tax Credits (EITC) and Additional Child Tax Credits (ACTC) by February 15, 2018, but the earliest the refunds will appear in bank accounts will be February 27, 2018. 4. The filing due date without extensions for 2017 S-Corporations, Partnerships and LLCs (except single person LLCs) is March 15, 2018, with the extended due date of September 15, 2018. 5. The filing due date for Individuals, calendar Trusts and Estates and calendar C-Corporations is April 17, 2018 (remember good old Emancipation Day!), with the extended due date of October 15, 2018. 6. Fiscal Year business entities have other due dates depending on their year-end. Here you go; now make sure you file on time! For financial, accounting and tax musings, You can count on us to count for you! Email: bstonercpa@sbcglobal.net Phone: 818-317-6035 Website: www.briantstonercpa.com AWARDED BEST ACCOUNTANT IN BURBANK, CA BY BEST BUSINESSES 2016, 2015 AND 2014! ALSO CHOSEN [...]
Tax Musings of a Burbank CPA: How Tax Reform Will Change Some Industries and Professions
Well, the House of Representatives and the Senate have passed their Tax Reform packages, and now we will wait for the reconcilation to find out what tax laws we will have for 2018 onward. Now let me say that the top 1% of the tax population (over approximately $465,000 a year in income) should be very happy – it seems they and large corporations are going to be getting a lot of the tax savings in this bill, whether it be reduced rates, reduction or repeal of the AMT (Alternative Minimum Tax) and reduction of the Estate Tax. Lower income people will also get some additional tax savings. What about the middle class (those earning between $60,000 and $140,000 a year)? They will either get a small tax break or get screwed depending on how their income and deductions pencil out. Let’s talk about people in the entertainment field and sales people on payroll with their companies. I have many people in this area who write off all of their out of pocket expenses not reimbursed by their employers on Schedule A as miscellaneous itemized deductions. Guess what, guys? In both versions of tax reform, these types of itemized deductions [...]