I recently had the opportunity to attend the National Association of Tax Professionals 2018 Tax Forum and Expo in Las Vegas. With Lodovico & Associates chairman and founder, Gene, I spent three days attending seminars and lectures on a variety of tax topics with everyday impacts on our clients. After all, at our practice, it’s a top priority to stay informed on tax law updates and to understand the tax laws inside and out to best benefit our clients.
Following the conference, I’d like to share some of the key topics presented should they provide benefits to your specific individual or business tax situation. I look forward to the opportunity to discuss any of these topics with you in greater detail to understand how we at Lodovico & Associates can ensure we are working with you personally on tax-saving strategies, tax law issues, and preparing for your future.
Mortgage Interest Rules
One of the newest tax laws is around how mortgage interest can be deducted – in fact, it limits mortgage interest deductibility. As preparation for 2018 returns start, it is important to consider what qualifies as deductible mortgage interest. You may be surprised to learn that the deduction is capped at $750,000 for mortgage loan balances taken out after Dec. 15, 2017. The limit is still $1 million for mortgages established before Dec. 15, 2017.
Depreciation and Bonus Depreciation
Business owners: it’s likely that you’re regularly purchasing assets used for your trade or business. The cost of these assets is recovered through depreciation, an annual allowance for wear and tear, deterioration or obsolescence of the assets. Understanding general tax depreciation rules and how to apply them to our business assets can certainly impact your upcoming tax return filings.
Multi-Level Marketing Activities – Hobby or Business?
Are you in the world of direct sales, multi-level marketing or network marketing with a business such as Avon or LuLaRoe, among others? Across the country, thousands or more taxpayers pursue opportunities like this and view them as business enterprises. However, the tax law may say differently and consider these activities as a hobby. If this pertains to you, let’s discuss the differences between a business and a hobby and how to report your activities on your next return.
Selecting the Correct Business Entity
From a sole proprietorship to LLC or others, new business owners often face the question of what business entity is correct for their new endeavors. With the recent tax law changes, new business owners may need to reevaluate their strategy and review the criteria for each entity as the new law may impact tax implications on varying entities.
This is big. The new tax law introduces the §199A for qualified business income, which is often referred to as the 20% deduction. The new deduction is subject to numerous qualification requirements, limitations, and special rules. Our tax advisers and consultants can help to determine if you may benefit from this deduction and if your income qualifies.
By Tony Lodovico. Tony has been a partner of Lodovico & Associates, P.C. since 1990. Tony has over 30 years of professional accounting experience in both the private and public sectors of business. He also has over 15 years of experience in the evaluation of closely-held entities for such purposes as gift tax, estate tax, mergers and acquisitions and marital dissolution. He conducts numerous presentations and seminars on tax planning, entity formation, business valuation, cost segregation and estate tax services.