New Tax Law Will Change Divorce Tactics

When couples divorce, financial negotiations often involve alimony. The tax rules regarding alimony were dramatically changed by the Tax Cuts and Jobs Act (TCJA) of 2017, but existing agreements have been grandfathered. In addition, the old rules remain in effect for divorce and separation agreements executed during 2018. Beginning next year, the rules will change, and the roles will be reversed.

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Difference Between Property Managers and Outside CPA

Some of you who have rental property and are using only a property management company that purported offers as “in-house” accounting services should be advised that is not an ideal practice. You are entrusting a group with your investment and with funds to manage this. Too many times in Costa Rica, there are property managersRead more about Difference Between Property Managers and Outside CPA[…]

New Tax Deduction for Pass-Through Entities

Many small businesses are passthrough entities, including S corporations, partnerships, sole proprietorships, LLCs, and LLPs. The label indicates that all business earnings are passed through to the owners’ personal income tax returns. Thus, they avoid the corporate income tax.

The Tax Cuts and Jobs Act of 2017 contains a new tax benefit for pass-throughs. This provision is complex, but it is relatively straightforward for taxpayers with taxable income below $157,500 in 2018, or $315,000 on a joint return. Such business owners may qualify for a tax deduction that equals 20% of their qualified business income.

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U.S. Tax Reform Makes Home Equity Debt Less Attractive

A key component of the Tax Cuts and Jobs Act of 2017 is the expansion of the standard deduction for U.S. taxpayers. In 2018 standard deductions are $24,000 (married couples filing jointly), $18,000 (heads of household), and $12,000 (all others). These amounts are almost double the respective standard deductions in 2017. However, personal exemptions were eliminated. The new tax law also trims some itemized deductions. Taxpayers can either itemize or use the standard deduction, so some shift to the standard deduction is likely.

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