Bauman’s Tax Team Is Voted #1 Again!

BY Bauman Associates

 

People of the Chippewa Valley have spoken through Volume One’s Reader Poll and we are honored to be named to the Best Of list for the second year in a row. Our hope at Bauman Associates is that our team will continue to be a place where future generations feel welcome and are invited to help our community thrive. As our business and community evolve, our commitment to quality remains the same.

Bauman Associates, Ltd. has been serving the Chippewa Valley for more than 70 years. We also have an office in Hudson and remote workers from the Green Bay and LaCrosse areas. Besides offering excellent advice and helping individuals and other businesses reach their financial goals, we go beyond the numbers with our commitment to giving back.

Our Tax Team thanks you for voting them Number 1 Tax Service in Chippewa Valley – we look forward to another great year with our friends and clients.

 

 

Dinner with Bauman

BY Bauman Associates

 Students, don’t miss out on a free Dinner with Bauman!

Contrary to popular belief, there IS such a thing as a FREE dinner! Join accounting professionals from Bauman Associates on Thursday, May 2nd for pizza, door prizes and a unique opportunity to find out what it is like to work in a public accounting firm. Students will also learn about the employment opportunities Bauman Associates offers and network with leaders in the field. This event will take place at UW-Eau Claire in Davies Center, Dulany Inn (Room 122)  from 4:00 – 6:30 pm. Space is limited and applications are due May 1st, so submit yours today. We look forward to seeing you there!

Click here to access the Application Form

Year-End Tax Planning

BY Reidar Gullicksrud

Keeping up with the complex credit landscape can be difficult for organizations with limited resources. The Tax Cuts and Jobs Act (TCJA) adds another level of complexity to tax planning. In this article, we have outlined how the TCJA will impact key tax provisions and tax minimizing strategies.

Alternative Minimum Tax

 Alternative minimum tax (AMT) should be considered before you and/or your accountant begin to time income and deductions. AMT is a separate tax system that limits some deductions and disallows others, such as state and local income tax deductions, property tax deductions, and other miscellaneous itemized deductions that are subject to the 2% of AGI. Deductions include investment advisory fees and non-reimbursable employee business expenses.

The purpose of the AMT is to ensure those who receive a lot of tax breaks are still paying some level of federal income taxes. The AMT, originally intended to target high-income households, became problematic once it began affecting more and more taxpayers. Failing to account for inflation, the AMT began to impact middle-income households as wages increased.

To ensure that the AMT functions properly, the Tax Cuts and Jobs Act:

  • Increases the AMT exemption amounts
  • Raises the phaseout thresholds for these exemptions
  • Permanently indexes the exemptions for inflation going forward

Under the Tax Cuts and Jobs Act, fewer taxpayers will be affected by the alternative minimum tax. Speak with your tax professional regarding the changes made to the AMT exemption amounts.

Timing Income and Expenses

Timing is everything when it comes to income and expenses. Smart timing will reduce your tax liability, while poor timing can unnecessarily increase it.

If you don’t expect to be subject to AMT in the current or following year, consider income deferment. Deferring income and increasing deductible expenses for the current year is typically a good idea because it will postpone tax. If you expect to be in a higher tax bracket, or if tax rates are expected to increase, the opposite approach rings true.

Whatever the reason for timing your income and deductions, here are some income items you may be able to control:

  • Bonuses
  • Consulting or other self-employment income
  • U.S. Treasury bill income
  • Retirement plan distributions (to the extent they won’t be subject to early withdrawal penalties)

Followed by potentially controllable expenses:

  • State and local income taxes
  • Property taxes
  • Mortgage interest
  • Margin interest
  • Charitable contributions

Charitable Donations

Good deeds in the form of cash or in-kind items can reap great tax benefits. While the new tax reform does not eliminate charitable deductions, it does limit the tax incentive for charitable contributions. The new plan increases the standard deduction and reduces the tax bracket, meaning fewer people will itemize their deductions.

There are several giving strategies to consider, including:

  1. Bunching. Taxpayers whose itemized deductions fall short of the standard deduction should consider bunching their charitable contributions every other year. This idea works out very well for donors, allowing those who fall below the deduction threshold to exceed it every other or every third year.
  2. Donor-Advised Funds (DAF). The itemized donor gives an initial, larger gift to a donor-advised fund and receives the allowed tax deduction. The contribution grows tax-free and serves as a charitable fund from which the taxpayer can recommend gifts to charity in subsequent years.
  3. Charitable Gifts. Under the new tax law, donors can still take an income tax deduction on the full fair market value of appreciated assets that have been gifted to charity.
  4. IRAs. Taxpayers 70.5 years of age and older can request a distribution of up to $100,000 per year directly from their IRAs to charity. This gift would help satisfy the annual required minimum distributions from the IRA and be removed from the donor’s taxable income.

Before making a large donation to the charity of your choosing, discuss options with your tax professional.

Healthcare Breaks

The Tax Reform and Jobs Act changed the AGI threshold for medical expenses from 10% to 7.5% for 2017 and 2018 for all taxpayers.

If medical expenses were not paid through tax-advantaged accounts or were reimbursable by insurance and exceed 7.5% of your AGI, you can deduct the excess amount. Eligible expenses may include:

  • Health insurance premiums
  • Long-term care insurance premiums (limits apply)
  • Medical and dental services
  • Prescription drugs

You may be able to save tax by contributing to one of these accounts:

  • HSA – You can contribute pretax income to an employer-sponsored Health Savings Account — or make deductible contributions to a personal HSA.  For 2018, contributions are $3,450 for self-only coverage and $6,900 for family coverage. As a bonus, if you’re age 55 or older, you may contribute an additional $1,000. Like an IRA, HSAs can bear interest or be invested, growing tax-deferred. Balances can be carried over from year to year, and withdrawals for qualified medical expenses are tax-free.
  • FSA – An employer-sponsored Flexible Spending Account can be used to redirect pretax income.  The plan pays or reimburses you for qualified medical expenses, not to exceed $2,650 in 2018. The balance that remains at the end of the year you lose, unless your plan allows you to roll the balance over (up to $500).

Sales Tax Deduction

The state and local tax deduction, or SALT, now has a cap. While it remains in place for those who itemize their taxes, it now has a $10,000 limit. This is a significant change as filers could previously deduct an unlimited amount for state and local property taxes, plus income or sales taxes.

Self-Employed Taxpayers

As a self-employed taxpayer, you may benefit from other above-the-line deductions. You can deduct 100% of health insurance costs for yourself, your spouse, and your dependents, up to your net self-employment income. You can also deduct retirement plan contributions and, if you’re eligible, an HSA.

Estimated Payments and Withholdings

You can become subject to penalties if you don’t pay enough tax through estimated tax payments and withholding. Here are some strategies to help avoid underpayment penalties:

  • Know the minimum payment rules
  • Use the annualized income installment method
  • Estimate your tax liability and increase withholdings

Tax Credits

Now is also a great time for organizations to re-evaluate their annual budgets to improve profit margins and consolidate spending. One strategy worth exploring is new or revised tax credits to help offset the amount owed to federal and state governments and take advantage of any county or city localized tax credits. Capturing 2018 credits, as well as retroactive 2017 tax credit opportunities, can help your organization reduce its liability, lower its tax rate, and improve the bottom line.

For example, the employer tax credit, which was created by the TCJA, is available to employers who offer paid family and medical leave to their employees who earned $72,000 or less in 2017 or 2018. To qualify, employers must have a written policy that

  • covers all workers employed for a year or more,
  • provides at least two weeks of annual paid family and medical leave for each full-time qualified employee and offers a proportionate amount of leave for part-time qualified employees, and
  • pays at least 50 percent of the employee’s wages during the leave.

Whether you are an individual taxpayer or a small business owner, understanding your tax credit eligibility is important.

If you have questions about these or other tax saving tips, please contact one of our professionals to schedule your year-end planning meeting.

Bauman Associates Announces Two New Principals

BY Bauman Associates

Bauman Associates is pleased to announce the promotion of Daniel R. Carlson, CPA and Chad C. Ryder, CPA to Principal in the Eau Claire office. Both individuals have been with the firm for several years and play an important role in the delivery of services to our clients and the leadership of our firm.

Dan Carlson, CPA

Dan Carlson has been with Bauman Associates since 2003, occupying roles as a Manager on the audit, accounting services, and consulting teams, and now as Principal, specializing in healthcare clients. “Dan has earned the privilege of partnering with some of our most valuable clients on the A&A side of our business.  The level of knowledge and respect Dan brings to the firm is hard to match. Dan is an obvious choice for this promotion and we look forward to many more years of his outstanding contribution to the firm,” said Gregg Mleziva, Managing Principal of Bauman Associates.

 

Dan is a graduate of the University of Wisconsin-Eau Claire, where he received a Bachelor’s degree in Accounting. He is a licensed, certified public accountant in the state of Wisconsin and a member of the Wisconsin Institute of Certified Public Accountants (WICPA), the American Institute of Certified Public Accountants (AICPA), and Leadership Eau Claire. In addition, Dan is a member of the Eau Claire Regional Arts Council.

Daniel Carlson Tax and Accounting and Business Advisory Services in Wisconsin and Midwest

 

Chad Ryder, CPA

Since November 2004, Chad Ryder has been serving Tax and Business Planning clients of Bauman Associates.  Chad started his career at Bauman as a Manager and has enjoyed being able to indulge his passion for public speaking, developing relationships with clients, and being a part of a team oriented around client service. In his new role as Principal, Chad will continue to take part in new client development, mentoring young CPAs, and recruiting top talent. “Since joining our firm, Chad has gone from a reliable tax preparer to one of our most valued and sought-after tax advisors.  Chad is very active in our community and highly respected as one of the leaders in our firm.  Chad has a bright future ahead of him and we are proud to be a part of it,” said Gregg Mleziva, Managing Principal of Bauman Associates.

 

Chad holds a Bachelor’s degree from the University of Wisconsin-Eau Claire, where he majored in Accounting and minored in Economics. He is a licensed, certified public accountant in the state of Wisconsin and is a member of the American Institute of Certified Public Accountants (AICPA), the Wisconsin CPA Society (WICPA), the Institute of Management Accountants, and the UWEC Accounting and Finance Advisory Board. Additionally, he serves as President of the Chippewa Valley Chapter of Institute of Mangement Accountants and is an alumnus of Leadership Eau Claire.

Chad Ryder Tax and Accounting and Business Advisory Services in Wisconsin and Midwest 

About Bauman Associates, Ltd

Bauman Associates was founded in 1947 as a certified public accounting firm and has offices in Eau Claire and Hudson, Wisconsin.  The firm provides multi-discipline professional services to businesses and individuals including business consulting; accounting and auditing services; business valuation; forensic accounting; tax strategy, planning and preparation; accounting software training; payroll services; human resource consulting; and estate, trust and retirement planning. For more information, visit www.baumancpa.com or call 888‐952‐2866.

Changes to Fringe Benefits, Entertainment Expenses

BY Reidar Gullicksrud

Changes to Fringe Benefits, Entertainment Expenses

The tax reform legislation that Congress signed into law on December 22, 2017, was the largest change to the tax system in over 3 decades. The new tax code contains many provisions that will affect individual, estate, and corporate taxpayers. One of those changes, the elimination of a business-related deduction used for entertainment, amusement or recreation expenses, will make it costlier for business owners to entertain clients.

Previously, if an entertainment or meal expense was related to or associated with the active conduct of a trade or business, it was deductible up to 50 percent. Under the new tax code, these expenses are now considered the cost of doing business. In the chart below, we have highlighted the major changes.

Activity 2017 Old Rules 2018 New Rules
Qualified client meal expenses 50% deductible 50% deductible
Qualified employee meal expenses 50% deductible 50% deductible
Meals provided for employer convenience (incl water, coffee and snacks at the office for employees) 100% deductible 50% deductible (not deductible after 2025)
Client entertainment expenses

Event tickets

Qualified charitable events

50% deductible

50% deductible at face value of ticket

100% deductible

No deduction for entertainment expenses
Office holiday parties 100% deductible 100% deductible

 

The elimination of this deduction will impact business owners who are accustomed to treating clients to golf outings or providing clients with tickets to sporting events or concerts. Businesses will have to re-evaluate their entertainment expenses related to their trade or business, as these items are no longer 50 percent deductible.

In consideration of the elimination of this deduction, we recommend creating separate accounts for meals and entertainment expenses. Educating employees to separate their expenses will be vital as business meals will remain 50 percent deductible until 2025.

The IRS recently issued guidance regarding the business expense deduction for meals and entertainment expenses:

Taxpayers may continue to deduct 50 percent of the cost of business meals if the taxpayer (or an employee of the taxpayer) is present and the food or beverages are not considered lavish or extravagant. The meals may be provided to a current or potential business customer, client, consultant or similar business contact.

Furthermore, food and beverages that are provided during entertainment events will not be considered entertainment if purchased separately from the event.

The Department of the Treasury and the IRS expect to publish proposed regulations clarifying when business meal expenses are deductible and what constitutes entertainment. Until the proposed regulations are effective, taxpayers can rely on guidance in Notice 2018-76.

Entertainment expenses are notoriously targeted by auditors. Considering the law change, we anticipate these expenses to be a heightened area of concern during an audit. The professionals at Bauman Associates can help ensure you are in compliance, call us today at (715) 834-2001.

 

Sales Tax — What the Overturn of the Physical Presence Standard Means for Your Business

BY Chad Ryder

On June 21, 2018, The U.S. Supreme Court issued its highly anticipated decision in the South Dakota v. Wayfair case. The verdict, declaring that states can impose sales tax nexus without requiring a seller’s physical presence in the state, will have serious implications for all sellers, not just online retailers.

The decision overturns the Supreme Court precedent in Quill Corp. v. Dakota which required retailers to have a physical presence in a state before a state could require the seller to collect sales taxes from in-state customers.

The court’s decision sides with states like South Dakota, that were ultimately missing out on billions of dollars in income by not collecting sales tax from online retailers who lacked a physical presence in their state. According to the U.S. Government Accountability Office, state and local governments could have gained up to $13 billion in 2017 if states were given authority to require sales tax collection from all remote sellers.

Historical Perspective

In 1992, North Dakota attempted to require Quill Corporation, a retailer with no physical presence in North Dakota, to collect and pay sales tax for doing business in the state. Having done business through mail orders and by phone, Quill was able to successfully argue that they should not be required to pay taxes in a state in which they had no physical presence. The courts agreed, and thus the physical presence standard was born.

Since then, states have enacted a variety of nexus provisions to counteract the loss of revenue by out of state businesses that do not collect sales tax for the state. These types of provisions, which require remote sellers to collect tax or provide information about in-state customers, are known as remote seller nexus. This chart maps out the states that have passed legislation.

In the 1990’s, no one could have anticipated how predominate online sales and e-commerce would become. What was once a fraction of interstate sales had become a $450 billion industry. Supreme Court Justice Anthony Kennedy displayed willingness to revisit the Quill case, recognizing the decision had become dated. South Dakota identified the window of opportunity to re-challenge the 1992 Quill verdict. In a 5-4 ruling, the Supreme Court overturned Quill’s physical presence standard in Dakota v. Wayfair.

Who Will This Impact?

It is important to note that all sellers, not just online retailers, will be impacted by the overturn of the physical presence standard. This ruling will result in increased complexities for consumers, brick-and-mortar retailers, online retailers, accountants, and the technology companies that develop accounting software.

If your business sells products or services in multiple states, this ruling should warrant your attention. It will be imperative to be proactive; start by determining what the impact will be and plan accordingly.

Looking Forward

While states aren’t required to collect tax from out of state retailers, many states are expected to follow South Dakota’s path since these standards were reviewed by the Court for the Wayfair decision. Some states have passed economic nexus standards that are already in effect or will take effect within the next year.

If you would like to evaluate the impact this new law may have on your business, please contact Bauman Associates today by calling (715) 834-2001.

Gregg Mleziva Is Named Managing Principal at Bauman Associates

BY Bauman Associates

Eau Claire and Hudson, WI, September 12, 2018: Gregory D. Mleziva, CPA is named Managing Principal of Bauman Associates (Bauman) effective September 1, 2018. Mleziva succeeds John Satre, who has served as the firm’s Managing Principal since 2012.

This announcement represents Bauman Associate’s commitment to their clients and community and reinforces the firm’s cooperative focus toward a sustainable future. Over the next year, Satre and Mleziva will work closely to ensure a smooth and vibrant transition. Satre will continue managing client engagements and help mentor up-and-coming CPAs in his ongoing role as a Principal in the Firm.

“Bauman Associates is a vibrant firm, made up of a team of talented professionals, and it has been my honor to serve as Managing Principal the last few years. I’m confident that Bauman Associates will continue to emphasize excellent, timely client service under Gregg’s leadership,” says Satre.

Mleziva has a longstanding relationship with Bauman Associates, having served clients in the areas of Audit & Assurance, Accounting Controls, Reporting Services, and Consulting since 1990.

“I look forward to the opportunity to lead such a skilled group of individuals down a successful path such as I have experienced the past 28 years under the guidance of superior leadership. Our firm has a reputation of providing exceptional client service and it is my job to make sure we meet and continue to exceed such expectations while providing rewarding opportunities to our staff,” says Mleziva.

Bauman Associates has a rich history of service in the community and has become one of the premier accounting and consulting firms in the region, having recently been named Best Tax Service for 2018. In his new role, Mleziva will continue to build on the momentum established over the last 70 years and uphold the firm’s emphasis on superior client service.

 About Bauman Associates, Ltd

Bauman Associates was founded in 1947 as a certified public accounting firm and has offices in Eau Claire and Hudson, Wisconsin.  The firm provides multi-discipline professional services to businesses and individuals including business consulting; accounting and auditing services; business valuation; forensic accounting; tax strategy, planning and preparation; accounting software training; payroll services; human resource consulting; and estate, trust and retirement planning. For more information, visit www.baumancpa.com or call (715) 834-2001.

Bauman Associates’ Tax Team Voted #1

BY Bauman Associates

For the last eleven years, Volume One has turned to its readers to vote for their local favorites. From yummy places to eat to emerging bands to trusted tax services,  the community of Chippewa Valley weighs in on the best of the best.

 

As Volume One puts it, “the goal here is to make the Chippewa Valley a better place to live through the voices and votes of those who live here. Because really, the best burger joints or the best parks aren’t going to be the reason this is a great place to live. It’s the people here who populate those places and try new things and genuinely care about making their home great. After all, this is your home. Your neighbors are your neighbors. It’s up to both of you — not one or the other — to make this place great. There’s something kinda beautiful in that.”

Bauman Associates is honored to make Chippewa Valley’s Best Of list in 2018. Click to learn more about our Tax Services.

 

Bauman Associates Promotes Bernie Hull as COO and Director of HR

BY Bauman Associates

We are pleased to announce the promotion of BernadetteBernie” Hull, CPA, PHR, SHRM-CP to COO and Director of HR.

“We believe that developing great people is critical to the success of our firm and our clients. As with any business, it’s important that we have someone dedicated to overseeing the day to day operations of the business. Bernie knows our business, community and people exceptionally well,” stated Managing Principal John Satre.

Bernie has been with the firm since 1981 and is a principal in the firm. Further, in addition to her background as a CPA, Bernie regularly consults with the firm’s business clients on matters of operations and HR. Bernie will continue to lead the HR consulting services and assist with tax consulting services for clients in her role as COO and Director of HR for the firm.

“I am excited about my new role at Bauman Associates as we celebrate our 70th anniversary of service to our community and look forward to the exciting years ahead, working with our exceptional Bauman team and clients,” commented Bernie Hull. “I am truly grateful for this opportunity.”

Bernie has served in multiple roles in the firm as a CPA in the accounting, auditing and tax areas. She served as the firm’s first firm administrator from 1988 to 2003, obtaining her certification as an HR professional during that period. These experiences helped her to become uniquely qualified to assist clients with tax consulting, business administration, and HR management and consulting matters, becoming a principal in 2010.

Bauman Associates has a rich history of service in the community. It has grown over the years and has become one of the premier accounting and consulting firms in the Chippewa Valley and Hudson, WI marketplaces.

What You Need to Know About the Incoming Tax Law

BY Casper Haas

The tax reform legislation that Congress approved last month was the largest change to the tax system in over 3 decades. The last time the U.S. tax code saw such a significant reform was under President Reagan in 1986. Those reforms sought to simplify income tax, broaden the tax base and eliminate many tax shelters.

Under this new legislation, substantial changes have been made to both individual and corporate tax rates. While most of the corporate provisions are permanent, the individual provisions technically expire by the end of 2025. There is speculation whether a future Congress will uphold the Individual provisions.

The new tax code contains many provisions that will affect individual, estate, and corporate taxpayers. To help you prepare, we have highlighted a few of the most pertinent details below. Please keep in mind, the purpose of this article is to summarize the key provisions.

What’s Changing?

Tax Bracket Rates. While taxpayers will still fall into one of seven tax brackets based on their income, the rates have changed. Some of the brackets have been lowered. The new rates are: 10%, 12%, 22%, 24%, 32%, 35% and 37%.

Standard Deduction. The standard deduction has nearly doubled. For single filers it has increased from $6,350 to $12,000; for married couples filing jointly, it’s increased from $12,700 to $24,000.

Personal Exemption. Under the prior tax code, a taxpayer could claim a $4,050 personal exemption for themselves, their spouse and each of their dependents, thus lowering their taxable income. Under the new tax code, the personal exemption has been eliminated. For some families, this will reduce or counter the tax relief they receive from other parts of the reform package.

State and Local Tax Deduction. The state and local tax deduction, or SALT, now has a cap. While it remains in place for those who itemize their taxes, it now has a $10,000 limit. This is a significant change as filers could previously deduct an unlimited amount for state and local property taxes, plus income or sales taxes.

The Child Tax Credit. The child tax credit has been expanded, doubling to $2,000 for children under 17. It’s also available to more people. Single parents who make up to $200,000, and married couples who make up to $400,000 can claim the entire credit, in full.

Non-Child Dependents. A new tax credit is available for non-child dependents. Taxpayers can claim a $500 temporary credit for non-child dependents. This can apply to a number of people adults support, such as children over age 17, elderly parents or adult children with a disability.

Alternative Minimum Tax. Fewer taxpayers will be affected by the alternative minimum tax. The purpose of the AMT is to ensure those who receive a lot of tax breaks are still paying some level of federal income taxes. The exemption will rise to $70,300 for singles, and to $109,400 for married couples.

Mortgage Interest Deduction. Going forward, anyone purchasing a home will only be able to deduct the first $750,000 of their mortgage debt. Down from $1 million, this will likely only affect people buying homes in more expensive regions. Current homeowners will likely be unaffected.

529 Savings Accounts. In the past, 529 savings accounts were untaxed and could only be applied towards college expenses.  Under the new tax code, up to $10,000 can be distributed annually to cover the cost of sending a child to a public, private or religious elementary or secondary school.

Alimony Payment Tax Deduction. The tax deduction for alimony payments will be eliminated for couples who sign divorce or separation paperwork after December 31, 2018.

Moving Expenses Deduction. The tax deduction for moving expenses is also gone, but may be exceptions for members of the military.

Tax Preparation Deduction. Taxpayers can no longer deduct the cost of having their taxes prepared by a professional or the money they may have spent on tax preparation software.

Disaster Deduction.  Under the prior tax code, losses sustained due to a fire, storm, shipwreck or theft that insurance did not cover and exceeded 10% of their adjusted gross income, were deductible. Effective under the new tax code, taxpayers can only claim the disaster deduction if they are affected by an official national disaster.

Estate Tax. Prior to the tax reform, a limited number of estates were subject to the estate tax, a tax which applies to the transfer of property after someone dies. Now, even fewer taxpayers will be affected. The amount of money exempt from the tax — previously set at $5.49 million for individuals, and at $10.98 million for married couples — has been doubled.

Health Insurance Mandate. The failure to repeal Obamacare earlier this year afforded the Republicans the opportunity to eliminate one of the health law’s key provisions with tax reform. Effective in 2019, the individual mandate, which penalized people who did not have health care coverage, was eliminated.

Corporate Tax Rate. Beginning in 2018, the corporate tax rate has been cut from 35% to 21%.

Pass-through Entities. The owners, partners and shareholders of S-corporations, LLCs and partnerships will receive a tax break. Those who pay their share of the business’ taxes through their individual tax returns will have a 20% deduction.

To ensure business owners do not abuse the provision, the legislation has included additional terms to this provision.

Multinational Corporations. The new tax bill is a shift towards globalization, changing the way multinational corporations are taxed. Companies will no longer pay federal taxes on income they make overseas. These companies will be required to pay a one-time, 15.5% on cash assets and 8% on non-cash assets, on any existing offshore profits.

Nonprofit Organizations. There is a new 21% excise tax on nonprofit employers for salaries they pay out above $1 million.

Sexual Harassment Settlements. Companies can no longer deduct any settlements, payouts or attorney’s fees related to sexual harassment if the payments are subject to non-disclosure agreements.

Bonus Depreciation. The Bonus depreciation will increase from 50% to 100% for property placed in service after September 27, 2017, and before January 1, 2023, when a 20% phase-down schedule will begin. The previous rule that made bonus depreciation available only for new properties was also removed.

Vehicle Depreciation. The new tax bill raises the cap placed on depreciation write-offs of business-use vehicles. $10,000 for the first year a vehicle is placed in service; $16,000 for the second year; $9,600 for the third year; and $5,760 for each subsequent year until costs are fully recovered. The new limits only apply to vehicles placed in service after December 31, 2017.

What’s Staying the Same?

Student Loan Interest. You can still deduct Student Loan Interest – the deduction for this will remain max $2,500.

Medical Expenses. The deduction for medical expense was untouched. Rather, it was expanded by two years. Filers can deduct medical expenses that exceed 7.5% of their adjusted gross income for 2017 and 2018 tax years.

Teachers. Teachers will continue to deduct up to $250 to offset what they spend on resources for the classroom.

Electric Car Credit. If you drive a plug-in electric vehicle, you can still claim a credit of up to $7,500.

Home Sellers. Homeowners that sell their house and make a profit can exclude up to $500,000 (or $250,000 for single filers) from capital gains. The law still requires that it is their primary home and they have lived there for at least two of the past five years.

Tuition Waivers. Tuition Waivers, typically awarded to teaching and research assistants, will remain tax free.

What Does This All Mean?

Although doubling the standard deduction will arguably simplify the process of filing taxes for individuals, there are still deductions and credits to consider. More so, the filing for small businesses, can potentially become more complicated. Depending on your situation, it may be beneficial to review your filing status as part of an overall tax planning strategy.

Again, please keep in mind that the purpose of this article is to summarize the key provisions. Each client scenario will be different, and this has to be taken into account. The professionals in our office can answer the questions you may have regarding the individual, estate and corporate tax provisions outlined in the Republican’s tax reform bill.  Please give us a call if you have any questions.