Getting the most of this course
Section 1: Definitions
Basic definitions commonly used in tax planning
Section 2: Tax Law Changes
Discussion of some of the 2018 tax law changes
- Tax law changes excel template
- Personal Standard Deduction
- Tax Rate Changes – Individual
- Tax Rates – Corporation
- Moving expenses
- Medical expenses
- Mortgage interest
- State taxes
- Casualty loss
- Miscellaneous itemized deduction
- Child tax credit
- Opportunity Zones
- Employee credit for paid family and medical leave
- Tax Law Change Quiz
Section 3: Qualified Business Income Deduction
QBI- new deduction for 2018
Section 4: Tax Planning
Section 5: Tax issues specific to married entrepreneurs
Section 6: Multi year tax planning issues
Adjusted Gross Income
Adjusted gross income (AGI) is total income minus any deductions allowed by the tax law.
AGI is important because a lot of deductions and credit take AGI into consideration.
Most credits and deductions are disallowed when you AGI is too high.
The following deductions are allowed by the tax law:
Educator expenses for elementary and high school teachers.
If you are an elementary or high school teacher, you can deduct:
- $250 if single
- $500 if married filing jointly and both spouses are teachers
Health saving account
You’re qualified to have an HSA account if :
- Your health insurance plan has a high deductible
- You don’t have any other health insurance coverage, including medicare.
- You can’t be claimed as a dependent for tax purposes.
Health savings account are unique in that they go in and come out tax free. The 2018 annual HSA contribution limit for individuals is: $3,450 (up from $3,400 for 2017). For families it is $6,900 (up from $6,750 for 2017).
Half of self employment taxes
If you are subject to self employment taxes, half of it is deductible.
Other deductions include:
- Self employed health insurance premiums
- Penalty on early withdrawal of savings (CDs or time deposit savings)
- Traditional IRA contributions: contributions of up to 5,500 (6,500 if over 50) to a traditional IRA is deductible. Income limitations apply if covered by an employer plan
- Student loan interest
- Certain business expenses of reservists, performing artists and fee based government official
Using the excel template
To see how these adjustments affect you personally, watch this video to see how to enter data in the template. If you do not have the template yet, you can get it here.