Last Minute Tax Moves from MAREI’s Favorite Tax Expert

John Hyre here.

Sorry I have “gone dark” for the last 45 or so days. The usual pile-up of year-end work (i.e. – procrastinating entrepreneurs planning at the last minute kills my schedule every November & December) was brutal this year. Add some midnight oil being burned to digest the massive changes in the law and my schedule has been a bit overdone, to say the least.

I have included a list of “last minute” “to-do’s” and “year-end tax items” for your consideration. Scroll down a bit, it’s there.

Also: I will be presenting a webinar on new tax law changes and what real estate investors, small businesses, and SDIRA/401k investors should be doing about it. Congress has not given us much time to think or analyze, the changes take effect 1/1/18! The webinar will be on Thursday, January 4th. At $99, it is much cheaper than paying by the hour ($400/hour from January 1st) for the same information, see http://iralawyer.com/newtax/

In addition: Some of you have asked when the next SDIRA/401k workshop would be. It is February 3rd & 4th in Tampa, http://iralawyer.com/self-directed-ira-workshop/ for more information.

YEAR END THINGS TO DO

Get a notarized plan in place for a valuable $2,500 “expensing policy” (email chriso@realestatetaxlaw.com and he will send you the doc we send clients for their records, no charge)

Get your “Accountable Reimbursement Plan” in place (email chriso@realestatetaxlaw.com for that as well, no charge)

Prepay 2017 property taxes (that are due in 2018) on your personal residence – their deductibility will be limited after 2017, This strategy will not work with 2018 income taxes.

Consider prepaying 2018 charitable contributions in 2017 if you can afford to do so – itemized deductions will be limited after 2017, you want to benefit from them now if at all possible

You should almost certainly defer income into 2018 if possible – your bracket will probably be lower, and you paying taxes later beats paying them now

“Miscellaneous Itemized Deductions” are DEAD after 2017. Consider prepaying 2018 expenses for:

  • Appraisal fees for a casualty loss or charitable contribution;
  • Casualty and theft losses from property used in performing services as an employee;
  • Clerical help and office rent in caring for investments (“investments” mean activities that do not rise to the level of a “trade or business”);
  • Depreciation on home computers used for investments;
  • Excess deductions (including administrative expenses) allowed a beneficiary on termination of an estate or trust;
  • Fees to collect interest and dividends;
  • Hobby expenses, but generally not more than hobby income;
  • Indirect miscellaneous deductions from pass-through entities;
  • Investment fees and expenses;
  • Loss on deposits in an insolvent or bankrupt financial institution;
  • Loss on traditional IRAs or Roth IRAs, when all amounts have been distributed;
  • Repayments of income;
  • Safe deposit box rental fees, except for storing jewelry and other personal effects;
  • Service charges on dividend reinvestment plans; and
  • Trustee’s fees for an IRA, if separately billed and paid.
  • Tax prep (personal return only and only the non-business portions of it)
  • Employee expenses
  • Business bad debt of an employee;
  • Business liability insurance premiums;
  • Damages paid to a former employer for breach of an employment contract;
  • Depreciation on a computer a taxpayer’s employer requires him to use in his W2 job;
  • Dues to a chamber of commerce if membership helps the taxpayer perform his W2 job;
  •  Dues to professional societies;
  •  Educator expenses;
  •  Home office or part of a taxpayer’s home used regularly and exclusively in the taxpayer’s work;
  •  Job search expenses in the taxpayer’s present occupation;
  •  Laboratory breakage fees;
  •  Legal fees related to the taxpayer’s W2 job;
  •  Licenses and regulatory fees;
  •  Malpractice insurance premiums;
  •  Medical examinations required by an employer;
  •  Occupational taxes;
  •  Passport fees for a business trip;
  •  Repayment of an income aid payment received under an employer’s plan;
  •  Research expenses of a college professor;
  •  Rural mail carriers’ vehicle expenses;
  •  Subscriptions to professional journals and trade magazines related to the taxpayer’s W2 job;
  •  Tools and supplies used in the taxpayer’s W2 job;
  •  Purchase of travel, transportation, meals, entertainment, gifts, and local lodging related to the taxpayer’s W2 job;
  •  Union dues and expenses;
  •  Work clothes and uniforms if required and not suitable for everyday use; and
  •  W2 job-related education.
  •  Repayments of income received under a claim of right (only subject to the two percent floor if less than $3,000);
  •  Repayments of Social Security benefits; and
  • The share of deductible investment expenses from pass-through entities.