Blog
Recent Posts:Additional tax law changes in 2018529 College Saving Accounts can now be used to pay for private schools from Kindergarten to High School and Graduate School tuition. In addition to tuition, room and board and incidental expenses such as books and computers can also be paid for from a 529 Plan for college expenses.
“Kiddie Tax Changes”. The “Kiddie” tax, which taxes children up to age 18 and full time students up to age 24 on unearned income, has been modified. Unearned income includes investments and rental income. Instead of taxing the children at the parents’ rate, the income will be subject to trust tax rates. For Ordinary income the tax rates begin at 10% and quickly increase to 37%. For Investment income between $2,601 - $12,700, the tax rates is 15% and for Investment income in excess of $12,701, the tax rate is 20%.
Tax penalties for failure to have Health Care of up to $2,085 is eliminated.
Possible Business Income Deduction of up 20%- With qualifiers, limitations and exceptions, Schedule C business, Schedule E Rental, Sub-chapter S corporations , Partnerships, and LLC’s may receive up to a 20% deduction on what is referred to as “qualified business income”.
Qualified business income includes wages paid to the owner(s) from the business and the net income of the business. Because of the incredible complexity of this new deduction, a business owner will need a knowledgeable CPA to determine if their business qualifies and what the limitations may be.
A business may expense 100% of business equipment purchases and other Sec 179 “qualified property” of up to $1 Million.
Ron Lykins | 02/28/2018
|
View All
Subscribe
