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
Filing status depends on your marital status at year end (December 31st).
There are 5 filing statuses to choose from:
- Married filing jointly
- Married filing separately
- Head of household
- Qualifying widower
Your filing status is used to determine your filing requirements, standard deduction and affects your deductions and credit.
A single taxpayer is an unmarried taxpayer who is single and does not qualify for any other filing status.
A single person can either be a person who:
- has never been married, or
- was legally separated according to state law under a decree of divorce or separate maintenance. However, if your divorce wasn’t final at the end of the tax year, you are considered married,
- a widow who didn’t remarry before the end of the year.
Married filing jointly
A married filing jointly (MFJ) taxpayer is a taxpayer who is married and agrees to file a joint return with spouse. The joint return reports the combined income of both spouses.
You can file MFJ if you were married at the end of the tax year, even if you didn’t live with your spouse or if your spouse died during the tax year and you didn’t remarry.
Married filing separately
A married filing separately taxpayer is a taxpayer who is married and and refuses to file a joint return with spouse. This is the least advantageous filing status.
Head of household
This filing status is for unmarried individual who provide a home for certain other persons. You are considered unmarried for this purpose if any of the following applies.
- You were legally separated or divorced
- You are married but lived apart from your spouse for the last 6 months
- You are married to a nonresident alien at any time during the year and you don’t choose to treat him or her as a resident alien.
- You paid more than half the cost of your dependent for an entire year. Your dependent must be one of the following:
- A child, step child, younger sibling,niece or nephew who lived with you for more than half of the year; or
- A person who lived with you for the entire year and made less than $4,050 gross income (2017); or
- A parent whom you provide more than half the support.
If you were legally married at year end, you may still be able to claim the head of household status if the following apply:
- You paid more than half the cost of keeping up your home for the tax year
- You spouse did not live with you during the last 6 months of the tax year.
- Your home is the main home of your child
- Your spouse was a nonresident alien at any time during the year and you choose not to treat her as a resident alien.
Here is a worksheet to help you determine if you paid more than half the cost of keeping up the home HeadofHH.xlsx.
A qualifying widower is someone who lost is or her spouse during the tax year and would have otherwise have filed married filing jointly. The qualifying widower status can be used for 2 years following the year the spouse died.
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.