DiSabatino CPA Blog

DiSabatino CPA Blog

A blog by Michael DiSabatino CPA with topics on Tax Savings, Business, Management and more...
Mike's weekly post usually concentrated on tax saving strategies.

Your tax-time financial review

Your tax-time financial review

It's the new year … and that means it's time to review your financial affairs. Take advantage of all of that top-of-mind tax-time knowledge and increase your changes of a fiscally sound 2018.

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Avoid high RMD penalties

Avoid high RMD penalties

Required minimum distribution (RMD) rules are pretty strict. If you don't want to face a hefty fine, you must withdraw a certain amount of money every year from tax-deferred retirement plans like 401(k)s and traditional IRAs after you reach age 70½.

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2017 Tax Highlights Videos

2017 Tax Highlights Videos

Don't miss the new 2017 Personal and Business Tax Highlight videos posted in our Video Blog section.

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Tax Act News: Paycheck Withholdings Changing Now

The IRS released new income tax withholding tables that reflect the changes to the tax bracket structure in the Tax Cuts and Jobs Act (TCJA) passed in late December. Employers will have until Feb. 15 to update their payroll systems to reflect the new changes, and employees will start seeing the changes in their paychecks after that point.

The TCJA reduces income tax rates for almost all taxpayers. Widespread tax changes like this seldom happen, so it’s worth keeping an eye on your pay stubs over the next few weeks. The danger is that if the changes aren’t done right, you’ll either have too much tax taken out every paycheck, or end up with a big tax bill because too little was withheld. Here are some tips:

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Small Business Filing Deadline Approaching Fast: Form W-2s and 1099-MISCs are Due Jan. 31

If you own your own business or have a side business in addition to your regular job, you may need to send out several IRS forms by Jan. 31 this year.

The deadline is for forms you issue to employees and others who were paid as part of your business activities throughout the year. Forms W-2s and 1099-MISC forms that contain non-employee compensation in box 7 will have to be postmarked or sent electronically to both the IRS and the person you did business with on or before Jan. 31, otherwise you may face fines for each late form.

Most businesses understand that a W-2 is required for each of your employees. But did you know that you also may need to issue a 1099-MISC to each contractor or vendor you’ve done business with during the year?

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What the Tax Reform Act Means for You

What the Tax Reform Act Means for You

Revised: 12/28/2017

Congress has passed a tax reform act that will take effect in 2018, ushering in some of the most significant tax changes in three decades. There are a lot of changes in the new act, which was signed into law on Dec. 22, 2017.

You can use this memo as a high-level overview of some of the most significant items in the new act. Because major tax reform like this happens so seldom, it may be worthwhile for you to schedule a tax-planning consultation early in the year to ensure you reap the most tax savings possible during 2018.

Key changes for individuals:

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Reminder: Fourth Quarter Estimated Taxes Now Due - Now is the time to make your estimated tax payment

If you have not already done so, now is the time to review your tax situation and make an estimated quarterly tax payment using Form 1040-ES. The fourth-quarter due date is now here.

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"Stretch Out" a Tricky Inheritance

Inheriting a retirement account like a 401(k) or an IRA is more complicated tax-wise than if you’d been left a house or a set of golf clubs. Here’s a tip on how to use a “stretch out” to avoid being hit with a big tax bill.

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Tax Reform Passed -- What You Need to Know Now

Tax reform was passed by Congress this week and is expected to be signed into law soon. Most of the new laws take place in the 2018 and 2019 tax years, but there are a couple items that you need to know about right away for your 2017 taxes.

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2018 Mileage Rates: New mileage rates announced by the IRS

The IRS recently announced mileage rates to be used for travel in 2018. The Business mileage rate increases by 1 cent. The Medical and Moving mileage rates are also raised by 1 cent. Charitable mileage rates are unchanged.

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Tax Changes Are Near: What to Do NOW! Prepare to Make Some Final Moves in 2017

Both the House and Senate have passed versions of a tax reform bill. If a combined bill is passed and signed into law, it creates a unique window of possible tax savings during the last few weeks of 2017. But only if you prepare to act. Here are some tips.

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Tax Planning with Mutual Funds: Ten ideas to maximize the benefits of your investments

Mutual funds benefit from the long-standing belief that they allow investors to diversify their holdings without buying individual stocks. But to the unwary investor, tax surprises abound. From a tax planning viewpoint, here are some great mutual fund tips. Most of these tips assume your mutual fund investment is not in a retirement account (like a 401(k) or traditional IRA), unless otherwise noted.

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Forced to Withdraw from Retirement Accounts?! What you need to know

We're always being reminded to save for retirement in tax-advantaged accounts like 401(k)s or IRAs. But did you know the government does an about-face and forces us to take money out of those accounts once we reach retirement? It's called the required minimum distribution (RMD) rule. Here are some tips you should know about RMDs well before you reach retirement age:

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Avoid Tax Traps in Loans to Friends and Family

Lending to friends and relatives is a tricky business, and not only because of the stress it can place on your relationships. There are tax issues involved as well. If you have to lend money to someone close, here are some tips to do it right in the eyes of the tax code.

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Understanding Tax Terms: Installment Sales

If you use an installment sale to help sell real estate, you can benefit from tax deferral and possibly lower your overall tax bill. But you need to watch out for certain tax traps if you do.

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A Quick Look at the Proposed Tax Bill

I just started to look at the Tax Bill proposed by the House.  There are surprisingly many issues that have not been discussed in any articles or newscasts that I am aware of... Here are some of my initial take-a-ways :

  • Tax Preparation Fees deduction will be eliminated.
  • Alimony will not be deductible or taxable for divorce agreements signed after 12/31/2017.
  • The discussion of the "Maximum Tax Rate on Business Income of Individuals" is 2 pages long. I think it will take an 8-hour seminar to understand !!! 
  • "Simplification and Reform of Family and Individual Tax Credits" is 2 1/2 pages.
  •  "Simplification and Reform of Education Incentives" (3 1/2 pages). 
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Roll it Before You Pull it: Tips to avoid IRS penalties on 401(k) retirement plan distributions

While each retirement plan has similar early withdrawal penalty exemptions, they are not all alike. Knowing these subtle differences within 401(k) plans can help you avoid a 10 percent tax penalty if you take money out of the plan prior to reaching age 59 1/2. This is true because a basic rollover of funds into a Traditional IRA is a readily available option to avoid the penalty. You should consider rolling over your 401(k) into an IRA prior to early distribution when:

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IRS Releases Key 2018 Tax Information

The IRS recently announced key figures for 2018, using figures based on the Consumer Price Index published by the Department of Labor. Use these early figures to start developing your tax strategies for next year.

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2018 Social Security Changes Announced

The Social Security Administration announced this week a 2 percent boost to monthly Social Security and Supplemental Security Income (SSI) benefits for 2018. The increase is the largest since 2012, and is based on the rise in the Consumer Price Index over the past 12 months ending in September 2017.

For those still contributing to Social Security through wages, the potential maximum income subject to Social Security tax increases 1.2 percent this year, to $128,700. A recap of the key amounts is outlined here:

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Where Do You Think You're Going?! State tax authorities becoming very aggressive when you move

Suppose you retire to a new state with warm weather and lower taxes. If you keep a part-time home in your original state or you later decide to return, you could have a tax problem. State tax authorities may argue you never really left, and that you owe them a big tax bill for all the income you earned while away. Here are tips to ensure this does not happen to you.

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