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Families With College Students May Save Tax on Their 2017 Returns With One of These Breaks

Families With College Students May Save Tax on Their 2017 Returns With One of These Breaks

If you had a child in college (or graduate school) last year or were a student yourself, you may be eligible for some valuable tax breaks on your 2017 return. One of the breaks that had expired December 31, 2016, was just extended under the recently passed Bipartisan Budget Act of 2018: the tuition and fees deduction. A couple of tax credits are also available. Tax credits can be especially valuable because they reduce taxes dollar-for-dollar; deductions reduce only the amount of income that’s taxed. Higher education breaks 101 While multiple higher-education breaks are available, a taxpayer...

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Small Business Owners: A SEP May Give You One Last 2017 Tax and Retirement Saving Opportunity

Small Business Owners: A SEP May Give You One Last 2017 Tax and Retirement Saving Opportunity

Are you a high-income small-business owner who doesn’t currently have a tax-advantaged retirement plan set up for yourself? A Simplified Employee Pension (SEP) may be just what you need, and now may be a great time to establish one. A SEP has high contribution limits and is simple to set up. Best of all, there’s still time to establish a SEP for 2017 and make contributions to it that you can deduct on your 2017 income tax return. 2018 deadlines for 2017 A SEP can be set up as late as the due date (including extensions) of your income tax return for the tax year for which the SEP is to first...

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TCJA Temporarily Lowers Medical Expense Deduction Threshold

TCJA Temporarily Lowers Medical Expense Deduction Threshold

With rising health care costs, claiming whatever tax breaks related to health care that you can is more important than ever. But there’s a threshold for deducting medical expenses that may be hard to meet. However, the Tax Cuts and Jobs Act (TCJA) temporarily reduces this threshold. What expenses are eligible? Medical expenses may be deductible if they’re “qualified.” Qualified medical expenses involve the costs of diagnosis, cure, mitigation, treatment or prevention of disease, and the costs for treatments affecting any part or function of the body. Examples include payments to physicians,...

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Claiming Bonus Depreciation on your 2017 Tax Return May Be Particularly Beneficial

Claiming Bonus Depreciation on your 2017 Tax Return May Be Particularly Beneficial

With bonus depreciation, a business can recover the costs of depreciable property more quickly by claiming additional first-year depreciation for qualified assets. The Tax Cuts and Jobs Act (TCJA), signed into law in December, enhances bonus depreciation. Typically, taking this break is beneficial. But in certain situations, your business might save more tax in the long-term by skipping it. That said, claiming bonus depreciation on your 2017 tax return may be particularly beneficial. Pre- and post-TCJA Before TCJA, bonus depreciation was 50%. Qualified property included new tangible property...

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State and Local Sales Tax Deduction Remains, But Subject to a New Limit

State and Local Sales Tax Deduction Remains, But Subject to a New Limit

Individual taxpayers who itemize their deductions can deduct either state and local income taxes or state and local sales taxes. The ability to deduct state and local taxes — including income or sales taxes (as well as property taxes) had been on the tax reform chopping block, but it ultimately survived. However, for 2018 through 2025, the Tax Cuts and Jobs Act has imposed a new limit on the state and local tax deduction. Will you benefit from the sales tax deduction on your 2017 or 2018 tax return? Your 2017 return The sales tax deduction can be a valuable one if you reside in a state with...

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2 Tax Credits Just for Small Businesses May Reduce Your 2017 and 2018 Tax Bills

2 Tax Credits Just for Small Businesses May Reduce Your 2017 and 2018 Tax Bills

Tax credits reduce tax liability dollar-for-dollar, potentially making them more valuable than deductions, which reduce only the amount of income subject to tax. Maximizing available credits is especially important now that the Tax Cuts and Jobs Act has reduced or eliminated some tax breaks for businesses. Two tax credits that are still available are especially for small businesses that provide certain employee benefits. 1. Credit for paying health care coverage premiums The Affordable Care Act (ACA) offers a credit to certain small employers that provide employees with health coverage....

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