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Tax Tips & Updates

Tax Credits for Education

Are you paying for higher-education for yourself or a dependent? Don't overlook the tax credits offered by the IRS.

There are two credits available to help taxpayers offset the costs of higher education:  The American Opportunity Tex Credit and the Lifetime Learning Credit. 

Employer Credit for Family and Medical Leave

Employers who provide paid family and medical leave to their employees might qualify for a credit that can reduce the taxes they owe. Here are some facts about the credit to help employers determine if they are able to claim it.

To be eligible, an employer must:

Have a written policy that meets several requirements. Provide: 

Small business owners should revisit the amount of estimated tax payments

If you pay quarterly estimated tax payments, you may want to revisit the amount you pay.

The Tax Cuts and Jobs Act changed the way most taxpayers calculate their tax. These taxpayers include those with substantial income not subject to withholding, such as small business owners and self-employed individuals. The tax reform changes include:

2018 Tax Tip: Charitable Contributions & Medical Expenses

 

The new tax law, effective after 2017, and how it affects Charitable Contributions and Medical Expenses:

 

Charitable Contributions

- The 50% limitation under Code Sec. 170(b) for an individual’s cash contributions to public charities and certain private foundations is increased to 60% for cash contributions made in 2018 through 2015.

Tax reform and the child tax credit

What changed?

- The new law increases the child tax credit from $1,000 to $2,000.

- Eligibility factors for the credit have not changed. As in past years, a taxpayer can claim the credit if all of these apply:
     • the child was younger than 17 at the end of the tax year
     • the taxpayer claims the child as a dependent
     • the child lives with the taxpayer for at least six months of the year

100% Depreciation Deduction For Businesses

One of the changes brought about by Tax Reform legislation passed in December 2017 allows businesses to write off most depreciable business assets in the year they place them in service.

The 100% depreciation deduction generally applies to depreciable business assets with a recovery period of 20 years or less and certain other property. Machinery, equipment, computers, appliances and furniture generally qualify.

NEW TAX LAW: Do You Usually Itemize Deductions? Check Your Withholding To Avoid Surprises

If you have been itemizing deductions on your 1040, you may be affected by changes from the Tax Cuts and Jobs Act. You should take a few minutes to use the IRS Withholding Calculator to make sure your employer is withholding the appropriate amount of tax from your paychecks for your financial situation.

New Tax Credit For Paid Employee Leave

A new provision of the Tax Cuts and Jobs Act (TCJA) creates a new tax credit for employers who pay wages for family and medical leave. The new credit, which takes effect in 2018, only lasts through 2019. However, there is a chance it could be extended by future legislation. Eligible employers can claim a credit equal to a percentage of wages paid to qualifying employees on leave under the Family and Medical Leave Act (FMLA).

The IRS has not yet fully described some of the provisions, but here are the highlights:

New 2018 Form W-4 And Employee Calculator

On Wednesday the IRS posted a NEW W-4 Form for 2018; the Employee's Withholding Allowance Certificate and Personal Allowances Worksheet . It is recommended that employees consider re-doing this form and worksheet each year as life situations may have changed and you may want to consider instructing your employer to change your withholding.  

The IRS also has a new Online Calculator.  If you are an employee, the Withholding Calculator helps you determine whether you need to give your employer a new Form W-4. You can use your results from the Calculator to help fill out the form and adjust your income tax withholding.  

The IRS encourages everyone to use the Withholding Calculator to perform a quick “paycheck checkup.”  This is even more important this year because of recent changes to the tax law for 2018.

Selecting And Working With A Tax Preparer

It's tax time again. Taxpayers should choose their tax return preparer wisely.  This is because taxpayers are responsible for all the information on their income tax return. That’s true no matter who prepares the return.

Here are several tips for taxpayers to remember when selecting a tax preparer:

Check the Preparer’s History. Ask the Better Business Bureau about the preparer. Check for disciplinary actions and the license status for credentialed preparers.

Ask about Service Fees. Avoid preparers who base fees on a percentage of the refund or who boast bigger refunds than their competition. When asking about a preparer’s services and fees, don’t give them tax documents, Social Security numbers or other information.

Contact

  • Address:DJL Accounting & Consulting Group, Inc.
    Cider Mill Professional Center, Building C-102
    1570 S Canfield Niles Road
    Youngstown, Ohio 44515 
  • Phone:330 779 0781