Skip to content
Tax Power-U.S. International Tax & Business Solutions
  • Fees & Policies
  • Contact Us
  • Tax Problems
Site Search
Uncategorized

New 2018 Tax Law Questions

  • June 25, 2018
  • by taxpower

Questions continue to pour in. Not surprisingly, most are on the new tax law. Now that the individual tax filing deadline has passed, people are starting to focus on their taxes for 2018. We’ll share some inquiries and our answers.

  • Can I still deduct IRA custodial fees?
  • No. The write-off for Schedule A miscellaneous deductions is gone, beginning with 2018 returns filed next year. These include investment account management fees, tax preparation fees and unreimbursed employee costs.
  • I recently left my full-time job, and I’m now an independent freelance writer. Can I claim the new 20% deduction for pass-through income?
  • Generally, Yes. It applies not only to individual owners of pass-through entities such as partnerships and LLCs, but also to self-employed individuals who file Schedule C with their returns. An important limitation applies to high earners in certain service fields. They include health, law, accounting, consulting, financial and brokerage services, performing arts, athletics, actuarial science, investing or trading in securities, or any business where the principal asset is the reputation or skill of its employees. If you’re in one of the affected fields and your total taxable income exceeds $315,000 for joint returns and $157,500 for all others, the 20% deduction begins to phase out. It’s zero once your taxable income exceeds $415,000 for couples…$207,500 for others.
  • Did the new law end the deferral of 100% of gain through like-kind swaps?
  • No. It survives, but only for exchanges of real estate not held primarily for sale. So, when investment or business real estate is exchanged for similar real property, any gain that would otherwise be triggered if the property was sold can be deferred. Prior to 2018, this break also applied to like-kind swaps of personal property such as heavy equipment, machinery, computers, railroad cars and airplanes.
  • I converted a traditional IRA to a Roth IRA last year, and it has lost money. Do I still have to undo the switch?
  • Yes, you have until Oct. 15, 2018, to eliminate the tax bill by transferring the converted funds back to a traditional IRA. This is called a recharacterization. If you’ve already filed your 2017 return and paid tax on the conversion, you can file an amended return on Form 1040-X to seek a refund. Roth conversions done after 2017 are irreversible. You still have the ability to convert your traditional IRA to a Roth, but you won’t be able to undo it later.
  • I’m thinking of adding solar panels to my home. Can I still get a tax break?

Yes, you can claim a credit for 30% of the total cost. For solar energy systems installed in a residence, the full credit applies through 2019 and then phases out… 26% for 2020 and 22% for 2021…until it ends after 2021. Ditto for the breaks for geothermal heat pumps, residential wind turbines and fuel cell property. What if I put in energy-efficient windows or doors? You’re out of luck, for now. The limited tax credit for these residential energy-saving items lapsed after 2017.

Recent Posts

  • Tax Lives Even After Death- Efficiently Administering an Estate by Andrew J. Powers
  • COMING TO AMERICA: U.S. Taxes for Aliens (including asylees) and Foreign Businesses operating in the U.S.
  • NEW BUSINESS OPPORTUNITIES AND CHALLENGES CREATED BY THE INTERNET AND NOW COVID-Double Taxation on Marketplace Facilitators like eBay, Amazon & Etsy- A Focus On Multistate Sales Tax.
  • IRS Delays Onerous Reporting Rules for Payment Platforms
  • How do IRS’s 2022 challenges and positions affect you?

Recent Comments

  • nonono on Deductible 2017 Passive Property Disaster Losses
  • Construindo Bankroll Chico Nogue on Deductible 2017 Passive Property Disaster Losses
  • remcos rat cracked on Deductible 2017 Passive Property Disaster Losses

Archives

  • February 2023
  • January 2023
  • December 2022
  • May 2022
  • March 2022
  • January 2022
  • January 2021
  • June 2020
  • April 2020
  • March 2020
  • January 2020
  • December 2019
  • March 2019
  • February 2019
  • January 2019
  • November 2018
  • October 2018
  • June 2018
  • May 2018
  • April 2018
  • March 2018
  • February 2018
  • January 2018
  • December 2017

Categories

  • Uncategorized

Meta

  • Register
  • Log in
  • Entries feed
  • Comments feed
  • WordPress.org

Recent Posts

  • Tax Lives Even After Death- Efficiently Administering an Estate by Andrew J. Powers

    12 Feb , 2023
  • COMING TO AMERICA: U.S. Taxes for Aliens (including asylees) and Foreign Businesses operating in the U.S.

    30 Jan , 2023
  • NEW BUSINESS OPPORTUNITIES AND CHALLENGES CREATED BY THE INTERNET AND NOW COVID-Double Taxation on Marketplace Facilitators like eBay, Amazon & Etsy- A Focus On Multistate Sales Tax.

    16 Jan , 2023
  • IRS Delays Onerous Reporting Rules for Payment Platforms

    29 Dec , 2022
  • How do IRS’s 2022 challenges and positions affect you?

    02 May , 2022
Theme by Colorlib Powered by WordPress