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Ask an Accountant Q&A

Discussion in 'North East' started by Sub_Par, Feb 27, 2018.

  1. Feb 27, 2018 at 9:10 AM
    #1
    Sub_Par

    Sub_Par [OP] Well-Known Member

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    I’ve been asking a lot of my Northeast brethren lately and I was contemplating a way I could “pay” it forward. Well I am offering some basic tax or business related advice to anyone who needs it. A little background: I have been a Public Accountant in NY for 11yrs and prepared Income, Corporation Tax returns during that time. I am also a Tacoma enthusiast and love to modify vehicles. I am getting more and more into off-roading even with the limited places near me. But this site has given me so much that I am hoping to give something back. And just a note, this is my extreme busy time so I may not answer right away, but I’ll try to respond to anyone who does ask advice. You can also PM me if it’s not something you want to ask in a Public Forum. Looking forward to hearing from you guys/ladies so fire away.

    - Steve

    P.S. Mods if this is against the rules in anyway please let me know and I can remove it.
     
  2. Feb 28, 2018 at 6:46 PM
    #2
    Spare Parts

    Spare Parts Changed

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    You need to itemize deductions which can reduce your income if it’s over your standard deduction.


    How will this be affected next year? If I understand correctly we will lose a few of these deductions.
     
  3. Feb 28, 2018 at 6:48 PM
    #3
    Redmann

    Redmann DILLIGAF

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  4. Feb 28, 2018 at 6:49 PM
    #4
    Redmann

    Redmann DILLIGAF

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    I have somewhere in my emails an article of what is going on with taxes specifically for real estate investors. Part of my 3 times a week email from a real estate forum I'm on. I'll find it later after work.
     
  5. Feb 28, 2018 at 6:51 PM
    #5
    YDCtaco

    YDCtaco Go Deacs!

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    Cool thread!


    It’s “accrual” world
     
  6. Feb 28, 2018 at 7:16 PM
    #6
    Sub_Par

    Sub_Par [OP] Well-Known Member

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    Well this is not a short answer.

    1. The standard deduction for a single filer is 6350 in 2017, MFJ (married filing joint) is 12700. In 2018 it will be 12000 and 24000 So this means that in order to itemize deductions in 2018 you need to be over the new standard of 12000 or 24000 for MFJ. For most people this means you no longer itemize deductions, so you’re not using property tax, mortgage interest, donations, out of pocket job expenses (which are eliminated in 2018), gambling losses and so on. This is because the new standard deductions are much higher. But wait there’s more. In 2017 you’re also given a personal exemption of 4050 for each person on your return. In 2018 that goes away. But wait what if I have 4 kids???? Well that means that you + wife + 4 kids = 24300 in an additional reduction of income is no longer allowed.

    Quick scenario, because this all confusing and this should make it somewhat easier.

    2017 Rules:
    You and your wife with 4 kids make 100k a year and your itemized deductions come to 15000.

    100,000 - 15000 - 4050 per person (24300) = 60700 taxable income

    2018 Rules
    Same family same kids and everything.

    100,000 - 24000 (because you no longer itemize since it’s not over 24k) = 76000 taxable income

    I know what your thinking, wait this is supposed to be a tax cut? What the hell?

    So in the above scenario you and your wife are now paying taxes on an additional 15300 in income. Well that sucks right, I’m being penalized for having kids.

    Well there is some good news, if you have children under the age of 17 then you can claim the child tax credit which is doubled to up to 2000 in 2018. Also that same couple which was in the 25% bracket in 2017 is now in the 22% bracket in 2018. So they would pay taxes on more income but at a higher rate, but also get potentially another 1000 per child in 2018.

    So most taxpayers will not really see an increase in there return, but more so break even.
     
    Redmann and Spare Parts like this.
  7. Feb 28, 2018 at 7:21 PM
    #7
    Sub_Par

    Sub_Par [OP] Well-Known Member

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    Additionally to out of pocket job expenses like mileage, union dues and such are no longer deductible. And SALT or state and local taxes can not exceed 10000. This means what you have deducted from your wages for state taxes plus any property taxes cannot exceed 10000. So if you make enough to withhold a good amount of state taxes or have high property taxes then you will be losing out on your itemized deductions. This won’t effect most taxpayers since they won’t itemize anyways. @Subway4X4 this should help answer your question.
     
    Redmann and Spare Parts like this.
  8. Feb 28, 2018 at 7:46 PM
    #8
    Sub_Par

    Sub_Par [OP] Well-Known Member

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    Crickets... did I confuse a lot of you?
     
    Redmann likes this.
  9. Feb 28, 2018 at 7:48 PM
    #9
    Redmann

    Redmann DILLIGAF

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    Not yet!
     
  10. Feb 28, 2018 at 7:50 PM
    #10
    DoubleRGirl

    DoubleRGirl Hello Kitty Edition

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    Wait wait wait I can't do my mileage anymore going forward??
     
  11. Feb 28, 2018 at 7:51 PM
    #11
    Spare Parts

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    Nope, just not much to say. I think the IRS needs to be shut down like the original plan. We need to move to a use tax system. But this conversation may lead to places not discussed on TW.
     
    Sub_Par [OP] likes this.
  12. Feb 28, 2018 at 7:52 PM
    #12
    Sub_Par

    Sub_Par [OP] Well-Known Member

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    Not if your an employee and not a sub contractor.
     
  13. Feb 28, 2018 at 7:53 PM
    #13
    Sub_Par

    Sub_Par [OP] Well-Known Member

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    It’s not a tax cut for everyone, that’s for sure.
     
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  14. Feb 28, 2018 at 7:54 PM
    #14
    DoubleRGirl

    DoubleRGirl Hello Kitty Edition

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    Wtffff I do like 25k work miles per year
     
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  15. Feb 28, 2018 at 7:56 PM
    #15
    Sub_Par

    Sub_Par [OP] Well-Known Member

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    For 2017s taxes which your doing now you still can use it if it’s over 2% of your income. But for 2018 it’s gone.
     
  16. Feb 28, 2018 at 7:58 PM
    #16
    Sub_Par

    Sub_Par [OP] Well-Known Member

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    You need to be reimbursed by your employer or find a new job. And I am not being a dick just tying to help.
     
  17. Feb 28, 2018 at 8:02 PM
    #17
    DoubleRGirl

    DoubleRGirl Hello Kitty Edition

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    They reimburse me for $0.14 of it, and then I get the difference back on my taxes
     
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  18. Feb 28, 2018 at 8:03 PM
    #18
    Sub_Par

    Sub_Par [OP] Well-Known Member

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    After this year that $0.14 is all you get.
     
  19. Feb 28, 2018 at 8:08 PM
    #19
    DoubleRGirl

    DoubleRGirl Hello Kitty Edition

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    #icant #fml
     
  20. Feb 28, 2018 at 8:21 PM
    #20
    Sub_Par

    Sub_Par [OP] Well-Known Member

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    Don’t want it getting political in here, but you know who to thank for the new IRS laws.
     
    DoubleRGirl likes this.

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