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.

"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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Major Tax Reform: What is Proposed

There is now a ton of media chatter about the recently introduced federal tax reform package being passed around in Washington, D.C. While it's still early in the process, here are some of the key elements of the current proposal.

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Seeing Inside the Mind of the IRS: Using the IRS Audit Technique Guidelines (ATGs)

While most of us are never audited, when it happens we can feel like a lamb thrown in a room with a lion. The IRS auditor does these audits every day. They know what to look for, and may ask leading questions that are easy to answer incorrectly. Here are some tips to help you when you are in the crosshairs of an IRS audit.

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Five Tax-Loss Harvesting Tips

Though the markets have been up strongly this year, your investment portfolio could have a few lemons in it. Using the tax strategy of tax-loss harvesting, you may be able to turn those lemons into lemonade. Here are five tips:

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Alternatives to the College Tuition Deduction

Now that college students are settling into their first weeks of school, it's important for parents and students to recall that the $4,000 tuition and fees deduction they may have relied on in past years is no longer available in 2017. The good news is that there are alternatives. Here are two of the more popular education credits:

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Reminder: Third Quarter Estimated Taxes Due!!!

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 third-quarter due date is now here.

Normal due date: Friday, September 15th 2017

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One Last Checkup: Are you withholding enough for your taxes?

As we enter into the fall months, it's a good time to check your tax withholdings to make sure you haven't been paying too much or too little. This is especially true if major changes took place in your life this year to your marital status, number of dependents, or your employment.

This quick checkup will ensure you are not surprised with a large tax bill when you file your income tax return. Fortunately, you still have a few months left to fix any problems. 

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Save on Your Doggone Taxes: The IRS and your pets

It seems like there’s a tax statute that touches on nearly every aspect of our lives. But that’s not all. Tax laws also include the lives of our furry friends. That’s right, even your pets can show up in your tax return in surprising ways.

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