Last-Minute Tax Tips for Personal and Small-Business Filers
The arrival of April is an exciting time each year as we get to witness the annual rebirth of nature take place. Green leaves on trees, blooming flowers and the smell of fresh-cut grass all herald the arrival of spring.
Unfortunately, April’s advent also brings the annual federal income tax filing deadline. For many people, the days leading up to Tax Day can be a very stressful period. This year, the tax filing season is further complicated by rule changes brought about by the 2017 tax cut legislation.
To ease the filing pain, Hendersonville Lifestyle partnered with local expert Ernest (Buddy) Owen to help our readers navigate the tax maze. Buddy is an experienced professional who has been helping individuals and businesses deal with tax issues since 1978.
Implications of the 2017 Tax Cuts & Jobs Act
The Tax Cuts & Jobs Act was signed into law in 2017, although most provisions did not take effect until 2018. Key provisions affecting personal and small-business filers are summarized below.
- Increased form complexity
- Personal exemptions replaced with $500 tax credits
- Child tax credit increased from $1,000 to $2,000
- Standard deduction increased
- Many employee expense deductions eliminated
- Sales/state income tax deductions capped at $10,000
- Home equity interest not deductible unless tied to a home purchase
- New Qualified Business Income deduction
- New Bonus Depreciation rule for equipment purchases
- Entertainment expenses eliminated
Income Tax Tips
- Contribute to an Individual Retirement Account.
- If self-employed, contribute to a Simplified Employee Pension plan.
- Make withholding adjustments.
- If you deduct mileage, maintain a log.
- Establish separate personal/business checking accounts.
- Eco-Tip: Consider energy-efficient heating/cooling equipment and electric cars.
Owen’s Tax Service
102 Iris Drive, Hendersonville