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Personal Exemptions Suspended

Under pre-Act law, taxpayers determined their taxable income by subtracting from their adjusted gross income any personal exemption deductions. Personal exemptions generally were allowed for the taxpayer, the taxpayer’s spouse, and any dependents. The amount deductible for each personal exemption was scheduled to be $4,150 for 2018, subject to a phaseout for higher earners.

New law. For tax years beginning after Dec. 31, 2017 and before Jan. 1, 2026, the deduction for personal exemptions is effectively suspended by reducing the exemption amount to zero.

By |January 8th, 2018|New Tax Laws, Uncategorized|0 Comments
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Federal Open Market Committee Update

The Federal Open Market Committee left its targeted Federal Funds rate unchanged, and the stance of monetary policy remained accommodative.  While acknowledging that the case for an increase has strengthened, citing the solid labor market and improving pace of economic activity, the committee nonetheless decided to wait for further evidence of continued economic expansion.  The statement also noted that business investment remains soft and inflation is still below target.  However, 3 members did vote for a rate increase,  the largest number since the initial tightening last year. The language is being viewed as a signal that a rate hike in 2016 is still very much on the table.

Rates and Market:

  • Federal Funds Target: ¼ to ½ percent
  • Policy Bias: Remains accommodative
  • Market Reaction: Bond yields initially jumped slightly only to retrace 1-2bp below pre-announcement levels.

The FOMC announced the following actions and analysis:

  • 7 to 3 vote
  • Economic activity accelerating from sluggish pace earlier in the year
  • Labor and consumer spending is strong, business investment is still weak
  • Inflation is soft and expected to remain so
  • The case for tightening has strengthened, but more evidence is required

The Statement:

Information received since the Federal Open Market Committee met in July indicates that the labor market has […]

By |September 27th, 2016|Uncategorized|0 Comments
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1099 Requirements for 2015

The IRS requires that you file information returns (1099’s) for cash and check payments issued by your trade or business to individuals not treated as your employees as well as non-incorporated entities. The IRS strictly enforces the requirements and aggressively audits this area of the law; additionally, there are numerous penalties that may be assessed if you fail to comply. We recommend that PRIOR to making payments for services, you obtain taxpayer identification (ID) numbers from all of your service vendors. If they don’t provide you a SSN or IRS business ID number (EIN), you are required to withhold taxes on payments to that vendor. A 1099 form must be filled in if:

Amount Requiring Reporting

Contract Labor, Commissions, Director Fees and
Other Non-employee Compensation                                                      $600 or more

Dividends, Interest and Royalties                                                            $10 or more

Professional Fees               […]

By |March 11th, 2016|irs, Uncategorized|0 Comments
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Required Reporting by Employers Providing Self-insured Health Coverage

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Required Reporting by Employers Providing Self-insured Health Coverage:  The IRS reminds taxpayers that, starting with 2015 coverage, all providers of health coverage, including employers that provide self-insured coverage, must file annual returns with the IRS to report information about the coverage and about each covered individual. Applicable large employers subject to the Employer Shared Responsibility (ESR) provisions should report this information on Form 1094-C and Form 1095-C, while employers not subject to the ESR provisions should use Form 1094-B and Form 1095-B. An applicable large employer is one that employs an average of at least 50 full-time employees, including full-time equivalent employees, in the prior calendar year. The information will be reported for the first time on 2015 forms due in early 2016.

By |August 4th, 2015|Health care, Uncategorized|0 Comments
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Tax Savings Still Available for “Heavy” Trucks and Vans

As you know, unfavorable depreciation rules apply to most passenger autos and light trucks used in business. For a vehicle acquired in 2014, depreciation deductions are generally limited to the following amounts:

 

Cars

 

Light Trucks and Vans

Year 1

       $  3,160

      $   3,460

Year 2

           5,100

           5,500

Year 3

           3,050

           3,350

Year 4 and thereafter

           1,875

           1,975

 

If the business use percentage is less than 100% (which is often the case), your deductions are even smaller. You must multiply the above numbers by the business percentage.

Exception for Certain Trucks and Vans. Certain trucks and vans qualify for much more favorable depreciation rules. The key here is finding a vehicle that is not considered a “passenger auto” under the tax rules. According to IRS regulations, a truck […]

By |November 10th, 2014|tax deductions, Uncategorized|0 Comments
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The Internal Revenue Service has just issued the 2013 optional standard mileage rates

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By |November 26th, 2012|Uncategorized|0 Comments
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