Saving for Education: 529 Plans

Many parents are looking for ways to save for their child’s education and a 529 Plan is an excellent way to do so. Even better, is that thanks to the passage of tax reform legislation in 2017, 529 plans are now available to parents wishing to save for their child’s K-12 education as well as college or vocational school.

You may open a Section 529 plan in any state, and there are no income restrictions for the individual opening the account. Contributions, however, must be in cash and the total amount must not be more than is reasonably needed for higher education (as determined initially by the state). There may also be a minimum investment required to open the account, typically, $25 or $50.

Each 529 Plan has a Designated Beneficiary (the future student) and an Account Owner. The account owner may be a parent or another person and typically is the principal contributor to the program. The account owner is also entitled to choose (as well as change) the designated beneficiary.Continue reading

Employee Spotlight – Marlena De Santiago

Marlena De Santiago, Administrative Assistant, has been chosen as Employee of the Quarter. Marlena joined our firm a little over a year ago. She is a great addition to our team. We really enjoy her upbeat and can do attitude at the front desk. Congratulations to Marlena and thank you for all your hard work!

Employee Spotlight – Nick Satterfield

Nick Satterfield, CPA, and Senior Accountant, has been chosen as Employee of the Quarter. Nick was hired as a Summer intern at Wheeler in June 2014, and upon graduation joined us as a full-time employee in April 2015. This year Nick completed the licensing process and became a CPA. Nick has become a well-rounded accountant with experience in our Audit, Tax and Accounting Services departments. Congratulations to Nick!

 

Health Care Tax Credit Relief for Small Employers

Tax relief is available for certain small employers who provide health coverage to their employees and wish to claim the Small Business Health Care Tax Credit for 2017 and later years.

To qualify for the credit small employers must provide employees with a qualified health plan from a Small Business Health Options Program (SHOP) Marketplace and may only claim the credit for two consecutive years.Continue reading

Home Equity Loan Interest Still Deductible

The Tax Cuts and Jobs Act has resulted in questions from taxpayers about many tax provisions including whether interest paid on home equity loans is still deductible. The good news is that despite newly-enacted restrictions on home mortgages, taxpayers can often still deduct interest on a home equity loan, home equity line of credit (HELOC) or second mortgage, regardless of how the loan is labeled.Continue reading

Using a Car for Business: New Rules under TCJA

Many of the tax provisions under tax reform were favorable to small business owners including those relating to using a car for business. Here’s what you need to know.

1. Section 179 Expense Deduction

If you bought a new car in 2018 and use it more 50 percent for business use, you can take advantage of the Section 179 expense deduction when you file your 2018 tax return. Under Section 179 you can immediately deduct (rather than depreciating) the cost of certain property in the year it is placed in service. In 2018, the Section 179 expense deduction increases to a maximum deduction of $1 million of the first $2,500,000 million of qualifying equipment placed in service during the current tax year. It is indexed to inflation for tax years after 2018.Continue reading

Self-Employed? Five Easy Ways to Lower your Tax Bill

If you’re like most small business owners, you’re always looking for ways to lower your taxable income. Here are five ways to do just that.

1. Deducting the Cost of a Home Computer

If you purchased a computer and use it for work-related purposes, you can take advantage of the Section 179 expense election, which allows you to write off new equipment in the year it was purchased if it is used for business more than 50 percent of the time (subject to certain rules).Continue reading

Reporting Virtual Currency Transactions

With the price of Bitcoin hitting record highs in 2017, many Bitcoin holders cashed out not realizing the impact it could have on their tax bill. Many people, for example, did not understand that it was a reportable transaction and found themselves with a hefty tax bill–money they may have been hard-pressed to come up with at tax time. Others may have been unaware that they needed to report their transactions at all or failed to do so because it seemed too complicated.

The good news is that if you failed to report income from virtual currency transactions on your income tax return, it’s not too late. Even though the due date for filing your income tax return has passed, taxpayers can still report income by filing Form 1040X, Amended U.S. Individual Income Tax Return.Continue reading

Correct Filing Status and Reporting Name Changes

If you haven’t filed your taxes yet, it’s time to stop procrastinating. If you’re not sure what to do first, the fastest way to get started is to figure out which filing status applies to you. In addition, if your name or that of a dependent changed during the tax year for which you are filing, then you will also need to report the name changes to the Social Security Administration.

Choosing the Correct Filing Status

Choosing the correct filing status is important because it can affect the amount of tax you owe for the year. It may even determine if you must file a tax return. Here are the five filing statuses you can choose from:

1. Single. This status normally applies if you aren’t married. It applies if you are divorced or legally separated under state law.

2. Married Filing Jointly. If you’re married, you and your spouse can file a joint tax return. If your spouse died in 2017, you can often file a joint return for that year.Continue reading

Late Filing and Late Payment Penalties

April 17 is the deadline for most people to file their federal income tax return and pay any taxes they owe. The bad news is that if you miss the deadline (for whatever reason) you may be assessed penalties for both failing to file a tax return and for failing to pay taxes they owe by the deadline. The good news is that there is no penalty if you file a late tax return but are due a refund.

Here are ten important facts every taxpayer should know about penalties for filing or paying late:

1. A failure-to-file penalty may apply. If you owe tax, and you failed to file and pay on time, you will most likely owe interest and penalties on the tax you pay late.

2. Penalty for filing late. The penalty for filing a late return is normally 5 percent of the unpaid taxes for each month or part of a month that a tax return is late and starts accruing the day after the tax filing due date. Late filing penalties will not exceed 25 percent of your unpaid taxes.Continue reading