Sullivan & Company - Certified Public Accountants 4709 Montgomery Lane #201 - Bethesda, MD, 20814 Phone: 301-657-8080

       

 



 



 

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This Month's Feature Articles

 

- Missing Important Tax Forms? Here's what to do
 

- Tips for a Stress-Free Tax Season
 

- Donating a Car to Charity
 

- Federal Tax Forms: Which one should you use?
 

- Five Tax Breaks that Survived Tax Reform

 

Tax Tips

 

- Tax Filing Season Begins; Tax Returns due April 17
 

- Who Should File a 2017 Tax Return?
- Updated Withholding Tables for 2018
 

- Employers: Beware of the Form W-2 Scam
 

- Owing Back Taxes could Affect Passport Renewal



 

 

 

 

 

 

5 Tax Breaks That Survived Tax Reform


 

Recent tax reform legislation affected many provisions in the tax code. Many were modified, either permanently or temporarily, while some were repealed entirely. Here are five that survived.

1. Mortgage Interest Deduction

While the House bill repealed the mortgage interest deduction, the final version of the act retained it, albeit with modifications. First is that the allowed interest deduction is limited to mortgage principal of $750,000 on new homes (i.e., new ownership). For prior tax years, the limit on acquisition indebtedness was $1 million. Existing mortgages are grandfathered in, however, and taxpayers who enter into binding contracts before December 15, 2017, to close on the purchase of a principal residence before January 1, 2018, and who purchase such residence before April 1, 2018, are able to use the prior limit of $1 million.

2. Personal Taxes: State and Local Income Tax, Sales Tax and Property Tax

In prior years, taxpayers who itemize were allowed to deduct the amount they pay in state and local taxes (SALT) from their federal tax returns. Slated for repeal (with the sole exception of exception of a state and local property tax deduction capped at $10,000) under both the House and Senate versions of the tax bill, SALT remained in the final tax reform bill in modified form. As such, for taxable years 2018 through 2025, the aggregate deduction for property taxes, state, local, and foreign income taxes, or sales taxes is limited to $10,000 a year ($5,000 married filing separately).

 


 

3. Educator Expense Deduction

Primary and secondary school teachers buying school supplies out-of-pocket are still able to take an above-the-line deduction of up to $250 for unreimbursed expenses. Expenses incurred for professional development are also eligible. This deduction was made permanent with the passage of PATH Act of 2015 and survived tax reform legislation that passed in 2017 as well.
 


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4. Plug-In Electric Drive Vehicle Tax Credit

Also slated for elimination in the House bill (but retained in the final tax reform bill) was the tax credit for the purchase of qualified plug-in electric drive motor vehicles including passenger vehicles and light trucks. For vehicles acquired after December 31, 2009, the minimum credit is $2,500. The maximum credit allowed is limited to $7,500. The credit begins to phase out for a manufacturer's vehicles when at least 200,000 qualifying vehicles have been sold for use in the United States (determined on a cumulative basis for sales after December 31, 2009).




 

5. Medical Expense Threshold Amounts

The House version proposed a repeal of the itemized deduction related to medical expenses but it was retained (and temporarily lowered) in the final tax reform legislation. For tax years 2017 and 2018, the threshold amount for medical expense deductions is reduced to 7.5 percent of AGI. Under the PATH Act of 2015, the medical expense deduction increased to 10% of AGI (effective for tax years 2013 to 2016).

Don't miss out!

If you're wondering whether you should be taking advantage of these and other tax credits and deductions, don't hesitate to call.


QUESTIONS?

While this list of 5 breaks survived, there are other important tax changes for 2018.  Don't hesitate to call if you want to get an early start on tax planning for 2018!  Call the office today at 301-657-8080.

 

DID YOU KNOW that Sullivan & Company manages Pension Funds, Retirement Plans & Taxable Accounts through Archer Investment Corporation & Fidelity Investments for our clients.
Fidelity is the custodian for more retirement plans than any other custodian in the United States.


Let Sullivan & Company Analyze Your Asset Allocation & Risk Tolerance for FREE!
Call 301-657-8080 today!

 


 

 Wealth Management at Sullivan & Co. CPAs

Paul Sullivan leads our Wealth Management Group and is here to help you navigate your financial future.

 

As Investment Advisor Representatives, he and our Wealth Management team are able to provide an independent opinion on the investments you already own or are considering buying.

 

We can structure a portfolio based on your risk tolerance or we can help you decide how to invest in your company 401(k) plan.

 

We work with each client to identify their concerns and to provide solutions according to their situation.

Paul is also experienced in company retirement plans. If you own a business that does not have a plan; we can discuss your options and set up a plan that fits your company.

 

If your business already has a plan; we offer a free evaluation of the plan to ensure that it is up to date and working well for you and your employees.

Our goal is to provide personal, unbiased and independent advice to help you make well-informed decisions about your financial life and investments.

Contact Chris Bailey, CPA, MBA, IAR or Ben Perron, CPA, IAR or Paul Sullivan, CPA, IAR to set up a free initial consultation (301) 657-8080.

And as always if you have any questions about accounting or investments and how they effect you or your business, please give us a call. We can help guide you in the right direction.

 


 

Remember you can call our offices if you have any questions about these or any other accounting, tax, financial planning or insurance related issues, at 301-657-8080. 

 

Regards, Paul Sullivan, CPA, IAR

President, Sullivan & Company

 

 

 

 

Sullivan & Company, CPAs | 4709 Montgomery Lane | Bethesda, MD 20814 www.eSullivan.net | email: pSullivan@eSullivan.net
Direct: 240-316-3531 | Main no.: 301-657-8080 Ext 102 | Fax: 301-657-9055