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How to Broker Better Tax Breaks on Rental Properties

Posted on December 19th, 2018

How Real Estate Tax Law Can Help – or Hurt – Your Bottom Line

If you’re in the real estate business as a broker and own rental properties, there are critical real estate tax law stipulations that impact your tax posture.

Most importantly, how much time and money you spend on rental properties, and how those activities are categorized will influence whether or not you can take deductions on your tax returns – and how large those deductions can be.

Read More…

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Don’t Miss Out! 7 Tips to Ensure Your Business Earns the 20% QBI Tax Deduction

Posted on December 17th, 2018

What is the 20% QBI Tax Deduction?

In the tax world – and at Robert P. Russo, CPA – everyone is talking about QBI. QBI stands for qualified business income, and it’s the key to unlocking a brand new 20% QBI tax deduction for certain business owners. Read More…

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Should my business be an S corp

7 Questions to Ask Before Hiring an NYC Accountant

Posted on December 12th, 2018

Congratulations! If you’re an entrepreneur or business owner on the hunt for an NYC accountant, it’s a sign of growth. It’s also a smart move. In a survey of 393 small business leaders, an accountant was ranked as the most important professional used by their business.

From potential tax savings to improved cash flow, an accountant is worth the investment – if you hire the right one. Before hiring an NYC accountant, ask these 7 questions:

Read More…

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Take Retirement Plan Distributions by December 31

Posted on December 5th, 2018

Taxpayers born before July 1, 1948, generally must receive payments from their individual retirement arrangements (IRAs) and workplace retirement plans by December 31.

Known as required minimum distributions (RMDs), typically these distributions must be made by the end of the tax year, in this case, 2018. The required distribution rules apply to owners of traditional, Simplified Employee Pension (SEP) and Savings Incentive Match Plans for Employees (SIMPLE) IRAs but not Roth IRAs while the original owner is alive. They also apply to participants in various workplace retirement plans, including 401(k), 403(b) and 457(b) plans. Read More…

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Recap of Business Tax Provisions for 2018

Posted on December 5th, 2018

Here’s what business owners need to know about tax changes for 2018.

Standard Mileage Rates
The standard mileage rate in 2018 is 54.5 cents per business mile driven.

Health Care Tax Credit for Small Businesses
Small business employers who pay at least half the premiums for single health insurance coverage for their employees may be eligible for the Small Business Health Care Tax Credit as long as they employ fewer than the equivalent of 25 full-time workers and average annual wages do not exceed $50,000 (adjusted annually for inflation). In 2018 this amount is $53,200. Read More…

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New Depreciation Deduction Benefits Business

Posted on December 4th, 2018

Tax reform legislation passed in December 2017 included numerous changes that affect businesses this year. One of them allows businesses to write off most depreciable business assets in the year they place them in service. Here are five facts to help businesses better understand this deduction:

1. The 100-percent depreciation deduction generally applies to depreciable business assets with a recovery period of 20 years or less and certain other property.

2. Machinery, equipment, computers, appliances, and furniture generally qualify.

3. The 100-percent depreciation deduction applies to qualifying property acquired and placed in service after September 27, 2017.

4. Taxpayers who elect out of the 100-percent depreciation deduction for a class of property must do so on a timely filed return.

5. The IRS has issued proposed regulations with guidance on what property qualifies and rules for qualified film, television and live theatrical productions, and certain plants.

For more details about the 100-percent depreciation deduction or electing out of claiming it, please call.

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Eight Tax Breaks for Parents

Posted on December 4th, 2018

If you have children, you may be able to reduce your tax bill using these tax credits and deductions.

  1. Child Tax Credit: You may be able to take this credit on your tax return for each of your children under age 17. Qualifying dependents must have a valid Social Security Number. This credit is refundable, which means you may a refund even if you don’t owe any tax.
  2. Credit for Other Dependents: This is a new tax credit under tax reform and is available for dependents for whom taxpayers cannot claim the Child Tax Credit. These dependents may include dependent children who are age 17 or older at the end of 2018 or parents or other qualifying relatives supported by the taxpayer. This credit is nonrefundable.
  3. Child and Dependent Care Credit: You may be able to claim this credit if you pay someone to care for your child under age 13 while you work or look for work. To claim this credit you will need to accurately track your child care expenses.
  4. Earned Income Tax Credit: The EITC is a benefit for certain people who work and have earned income from wages, self-employment, or farming. EITC reduces the amount of tax you owe and may also give you a refund.
  5. Adoption Credit: You may be able to take a tax credit for qualifying expenses paid to adopt a child.
  6. Coverdell Education Savings Account: This savings account is used to pay qualified expenses at an eligible educational institution, which starting in 2018, includes primary and secondary schools as well as colleges and vocational schools. Contributions are not deductible; however, qualified distributions generally are tax-free.
  7. Higher Education Tax Credits: Education tax credits can help offset the costs of education. The American Opportunity and the Lifetime Learning Credits are education tax credits that reduce your federal income tax dollar for dollar, unlike a deduction, which reduces your taxable income.
  8. Student Loan Interest: You may be able to deduct interest you pay on a qualified student loan. The deduction is claimed as an adjustment to income, so you do not need to itemize your deductions.

As you can see, having children can impact your tax situation in multiple ways. Make sure that you’re taking advantage of credits and deductions you’re entitled to by speaking to a tax professional today.

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Depreciating Farming Business Property

Posted on December 3rd, 2018

Farmers and ranchers should be aware of changes in how they depreciate their farming business property. These changes took effect in 2018 as a result of tax reform legislation passed in December 2017.

Depreciation is an annual income tax deduction that allows a taxpayer to recover the cost or other basis of certain property over the time that they use it. When figuring depreciation, there are a number of factors that should be taken into consideration such as wear and tear and deterioration of the property, as well as whether it is now obsolete. Read More…

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Avoid these Five Common Budgeting Errors

Posted on December 3rd, 2018

When it comes to creating a budget, it’s essential to estimate your spending as realistically as possible. Here are five budget-related errors commonly made by small businesses and some tips for avoiding them. Read More…

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The New Tax Law for Real Estate Brokers: How You Can Benefit

Posted on December 3rd, 2018

The New TCJA Taxes for Real Estate Brokers: What You Need to Know

When the Tax Cuts and Jobs Act (TCJA) became law in December 2017, real estate professionals immediately began contacting us with questions. Are there new breaks on taxes for real estate brokers? Will the TCJA increase taxes for real estate brokers?

However, the most common question we’re getting here at Robert P. Russo CPA is this: How can I get that new 20% qualified business income (QBI) deduction? That’s what we’ll focus on now… Read More…

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Retirement Contributions Limits Announced for 2019

Posted on December 2nd, 2018

Dollar limitations for pension plans and other retirement-related items for 2019 are as follows:

In general, income ranges for determining eligibility to make deductible contributions to traditional Individual Retirement Arrangements (IRAs), to contribute to Roth IRAs, and to claim the saver’s credit all increased for 2019. The contribution limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan also increases from $18,500 to $19,000. Contribution limits for SIMPLE retirement accounts for self-employed persons increase in 2019 as well – from $12,500 to $13,000. Read More…

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Year in Review: Tax Changes for Individuals

Posted on December 2nd, 2018

2018The Tax Cuts and Jobs Act of 2017 (TCJA) eliminated or modified numerous tax provisions starting in 2018. Here’s what individuals and families need to know as they get ready for tax season. Read More…

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Transition Rule for Rehabilitation Tax Credit

Posted on December 1st, 2018

The Rehabilitation Tax Credit offers an incentive for owners to renovate and restore old or historic buildings. Tax reform legislation passed in December 2017 changed when the credit is claimed and provides a transition rule, which is summarized below: Read More…

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Tax Transcript Email Scam Alert

Posted on December 1st, 2018

Taxpayers should be aware of a new round of fraudulent emails that impersonate the IRS and use tax transcripts as bait to entice users to open documents containing malware. The scam is especially problematic for businesses whose employees might open the emails infected with malware as it can spread throughout the network and may take months to remove. Read More…

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Tax Due Dates for December 2018

Posted on December 1st, 2018

December 10

Employees who work for tips – If you received $20 or more in tips during November, report them to your employer. You can use Form 4070.

December 17

Corporations – Deposit the fourth installment of estimated income tax for 2018. A worksheet, Form 1120-W, is available to help you estimate your tax for the year.

Employers Social Security, Medicare, and withheld income tax – If the monthly deposit rule applies, deposit the tax for payments in November.

Employers Nonpayroll withholding – If the monthly deposit rule applies, deposit the tax for payments in November.

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