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
Should I make that large purchase
When is the best time to make a large purchase?
This question is crucial when the taxpayer is considering making a large purchase at the end of the tax year.
The answer depends on which year the taxpayer foresees he or she will have the higher income. In years with higher income, more writes offs are needed to lower the adjusted gross income. This in turn, puts the taxpayer in a lower tax bracket and hence pays less tax.
Also, the lower adjusted income might put the taxpayer in a position where they can enjoy certain credits and deductions.
For example, if Joe intends to triple his income next year, he will be better off making the large purchase the following year. The higher deduction will reduce his gross income and in turn increase the likelihood that he will be eligible for credits like child tax credit, child care credit and the education credit. This has a multiplying effect on tax savings. Rather than saving $200 in year one, he could save $2,000 in year 2.