February 2, 2019

DK Feb Newsletter

  Qualified Business Income Deduction under the Tax Cuts and Jobs Act


Dear Clients and Friends


On December 22, 2017 the Tax Cuts and Jobs Act (the “Act”) was signed into law. The new tax law creates numerous tax-saving opportunities for businesses of all shapes and sizes. Notably, the new law carves out a brand new tax deduction for owners of pass-through entities and sole proprietors. This letter addresses the Section 199A deduction for qualified business income of pass-through entities and sole proprietors.

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  6 Last-Chance Tax Breaks: Do You Qualify?

The IRS is now accepting tax returns for 2017. But many people are uncertain how the new tax law will affect their 2017 taxes. As a general rule, it’s a good idea to maximize any deductions that are available to you for 2017, because some of them are repealed, suspended or modified under the new law for 2018. Here are six valuable breaks that will soon disappear, along with a list of deductions that survived tax reform.


  3 Affordable Care Act Taxes Postponed by Congress

A short-term government funding bill, which was signed into law recently, suspends three health care related taxes. These are the 40% Cadillac tax on employers that offer generous health insurance coverage, the 2.3% medical device tax and an annual excise tax on health insurance providers. Here are the details, including an update about the health coverage mandates for individuals and certain employers.


  Land Is Not Always a Low-Taxed Capital Asset

Ordinary income versus capital gains is a critical tax issue that often generates disputes with the IRS and winds up in U.S. Tax Court. In one case, the sale of property was ruled to be inventory for sale in the ordinary course of business and not eligible for preferential capital gains tax rates. Here are the details.


  Managing Your Business through a Crisis: 6 Steps to Success

Thinking through, in advance, the steps you would take in a crisis can go a long way to diffuse an otherwise disastrous situation. Would your company’s leaders be able to manage in the face of a threat? Would your staff panic or would they know what to do? Take a look at how some giants of commerce responded to business disasters, and how you can prepare for the unexpected.


  Avoiding the 10% Penalty On Early IRA Withdrawals

Do you have a traditional IRA? You may have wondered whether you should take money out of it when financial needs come up. If you are under age 59 1/2, there’s generally a 10% penalty for early withdrawals — in addition to any regular income tax on the amount. However, there are exceptions to the penalty, as explained in this article.