Congratulations to Managing Partner, Matt Wheeler and his wife Jenny on the birth of their third child. Alexandra Mary Wheeler was born on November 7, 2017. She weighed 6 lbs 7 oz and was 19 inches long. Mom and baby are doing well. Sister, Samantha and brother, Devin are thrilled to have a baby sister.

 

Congratulations to Nick Satterfield, Senior Accountant, who married his high school sweetheart, Shelby on Saturday, November 4^th. The wedding took place in Burlingame, close to where Nick and Shelby’s families live. The event was filed with family and friends. Wheeler wishes Nick and Shelby the best as they enjoy their new life together.

House Republicans released a sweeping overhaul tax plan on Thursday, November 2nd which includes a broad set of proposed changes to the corporate and individual tax system. Below is summary of major changes proposed.

 

 

New individual tax brackets

Single filers
	2017		Proposed under Trump’s Tax Plan
10%	$0 – $9,325	12%	$0-$45,000
15%	$9,326 – $37,950
25%	$37,951-$91,900	25%	$45,001-$200,000
28%	$91,901-$191,650
33%	$191,650-$416,700	35%	$200,001-$500,000
35%	$416,701-$418,400
39.6%	$418,401 or more	39.6%	$500,001 or more
Standard Deduction: $6,350		Standard Deduction: $12,000
Personal exemption: $4,050		Personal exemption: Eliminated
Joint filers
	2017		Proposed under Trump’s Tax Plan
10%	$0 – $18,650	12%	$0-$90,000
15%	$18,651-$75,900
25%	$75,901-$153,100	25%	$90,001-$260,000
28%	$153,101-$233,350
33%	$233,351-$416,700	35%	$260,001-$1,000,000
35%	$416,701-$470,700
39.6%	$470,701 or more	39.6%	$1,000,001 or more
Standard Deduction: $12,700		Standard Deduction: $24,000
Personal exemption: $8,100		Personal exemption: Eliminated

Other Changes:

• Itemized Deductions: Retains the mortgage interest and charitable deductions, as well as property tax deductions (capped at $10,000), but eliminates the remainder of state and loan tax deductions and other itemized deductions
• Other Deductions and Exclusion: Caps the mortgage interest deductions at $500,000 of principal of new home purchases. Eliminates the moving deduction, educator expense deduction, and exclusions for employer-dependent care programs, among others. Makes changes to the exclusion of capital gains on home sales.
• Family Tax Credits: Replaces the personal exemptions for dependents with an expansion of the child tax credit from $1,000 to $1,600, while increasing the phaseout threshold (from $115,000 to $230,000 for married filers). The first $1,000 will be refundable.
• Alternative minimum tax: Eliminates alternative minimum tax.

Business Taxes

• Corporate Tax Rate: Lowers the corporate tax rate from 35 to 20 percent.
• Pass-Through Rate: Creates a new 25 percent maximum tax rate on pass-through business income, subject to anti-abuse rules.
• Pass-Through Anti Abuse Rules: 70 percent of income derived from a business is compensation subject to ordinary rates of the owners and 30 percent is business income subject to the maximum 25 percent rate for active owners. Certain specified service industries, like health, law, financial services, professional services, and the performing arts are excluded from the 70/30 split and can only claim the benefit of the lower pass-through rate to the extent that they can “prove out” their business income.
• Capital investment: Allows full expensing of short-lived capital investment (currently subject to “bonus” depreciation), such as equipment and machinery, for five years. Increases Section 179 expensing from $500,000 to $5 million and increases the phaseout threshold from $2 million to $20 million.
• Tax Treatment of Interest: Limits the deductibility of net interest expense on future loans to 30 percent of earnings before interest, taxes, depreciation, and amortization (EBITDA), with a five-year carryforward, for all businesses with gross receipts of $25 million or more.
• Alternative Minimum Tax: Eliminates the corporate alternative minimum tax.
• International Income: Moves to a territorial tax system, in which foreign-source dividends and profits of U.S. companies are not subject to U.S. tax upon repatriation. However, 50 percent of excess returns (those greater than a routine return, defined as AFR plus 7 percent) earned by controlled foreign corporations (CFCs) are included in U.S. shareholders’ gross income. In addition, payments made from US corporations to a related foreign corporation are subject to a 20 percent excise tax unless the US corporation claims the transaction as effectively connected income (ECI). ECI is added to the taxable income of the US corporation, but the related foreign corporation’s expenses can be deducted from this income.
• Deemed Repatriation: Enacts deemed repatriation of currently deferred foreign profits, at a rate of 12 percent for cash and cash-equivalent profits and 5 percent for reinvested foreign earnings.

Estate Tax

• Increases the estate tax exemption to $10 million, which is indexed for inflation, and repeals the estate tax after six years.

 

 

Wheeler Accountants took their spookiness to a whole new level this year! We had a great turn out for our annual Halloween costume contest. The administrative team went all out on their Wheeler branded prison outfits. The votes were cast and the administrative team took the prize for best outfits.

Susan Conners, EA and Senior Tax Specialist, has been chosen as Employee of the Quarter. Sue joined Wheeler in 2016 as part of our merger with Leonard Williams, CPA. Sue brought a wealth of experience to Wheeler and has been a welcome addition to our team. Sue has provided a great deal of support for our Estate and Trust department, is responsive and is very thorough with her work. Our clients enjoy her calm, reassuring communication style and our Partners, Managers and staff appreciate that she is always willing to pitch in and help others wherever needed. Congratulations to Sue and thank you for all the hard work!

If you’re looking to save money on your taxes this year, consider using one or more of these tax-saving strategies to reduce your income, lower your tax bracket, and minimize your tax bill.

Max Out Your 401(k) or Contribute to an IRA

You’ve heard it before, but it’s worth repeating because it’s one of the easiest and most cost-effective ways of saving money for your retirement.

Many employers offer plans where you can elect to defer a portion of your salary and contribute it to a tax-deferred retirement account. For most companies, these are referred to as 401(k) plans. For many other employers, such as universities, a similar plan called a 403(b) is available. Check with your employer about the availability of such a plan and contribute as much as possible to defer income and accumulate retirement assets.Continue reading

Whether you’re self-employed or an employee, if you use a car for business, you get the benefit of tax deductions.

There are two choices for claiming deductions:

1. Deduct the actual business-related costs of gas, oil, lubrication, repairs, tires, supplies, parking, tolls, drivers’ salaries, and depreciation.
2. Use the standard mileage deduction in 2017 and simply multiply 53.5 cents by the number of business miles traveled during the year. Your actual parking fees and tolls are deducted separately under this method.

Continue reading

With less than three months remaining in the calendar year, now is a good time to double check your federal withholding to make sure enough taxes are being taken out of your pay.

Most people have taxes withheld from each paycheck or pay taxes on a quarterly basis through estimated tax payments. But each year millions of American workers have far more taxes withheld from their pay than is required. In fact, according to the IRS, the average individual income tax refund for Fiscal Year 2016 was about $3,050. As such, taxpayers might want to consider adjusting their tax withholding to bring the taxes they must pay closer to what they actually owe–and put more money in their pocket right now.Continue reading