This week, Raghav’s top reads are all about taxes – what the new tax reform could mean for you when filing your tax return, what you should be doing if you own cryptocurrencies and a light read on how 14 people tried to get tax breaks, but failed. We have included a comprehensive guide that outlines what each change in the 2018 tax reform means and another article which outlines what it means for high net worth families and individuals.
Have you ever thought of ways to “sneak” certain items into your tax return to get a break from the IRS? This article highlights several stories of ‘creative’ tax accounting, including this one about a tax preparer:
During tax season, she felt so harassed from clients calling her at all hours of the day and night that she occasionally booked a room at a local hotel for some peace and quiet. On her own return, she deducted the cost of this rest and relaxation as a business expense. Unfortunately for her, the Tax Court ruled that the cost of her good night’s sleep was a nondeductible personal expense.
Another story involved a man who paid to have his father’s death investigated, and deducted the expenses in case his findings could be turned into a book or movie. For the full story, and 12 others like these, click here.
If you find yourself entering tax season with newly acquired Bitcoin, Ethereum, or Ripple, you may think it’s safe not to claim this money as cryptocurrencies are “anonymous.” However, this is not the case. The government and IRS have ways of identifying owners of cryptocurrency and are actively working to find “tax-dodgers.” The IRS also released a document in 2014 with rules and FAQs for “virtual currencies.”
Many tax preparers are also unaware of how to handle cryptocurrencies when it comes to filing taxes. Futurism.com breaks down what you need to know (and what they still don’t really know) here.
Each year the IRS introduces changes that could affect how much (or how little) you will owe when filing your taxes. CNBC has outlined the 10 changes that have been implemented for this year – find out what those 10 changes are here.
Brittney Laryea and Shen Lu of Magnify Money have created a comprehensive guide that breaks down the most significant rewrite of the tax code in over 30 years. They have included the rules that are changing versus those that will remain the same, and have an easy-to-understand table that lists the old rules and new rules side by side. Their guide contains information about alimony, medical expenses, student loan debt discharge, along with 22 other items.
Officially, the new name of the bill is “An Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018”, but it’s been called the Tax Cuts and Jobs Act since it was introduced back in November 2017.
Read the full article here.
Similar to the article from Magnify Money, White & Case has put together an article explaining what the new tax reform means for high net worth individuals and families.
On December 22, 2017, the Tax Cuts and Jobs Act (the “Act”) was signed into law, accomplishing the most far-reaching US tax reform in decades. While the Act contains significant changes that will impact all US taxpayers, this overview is intended to highlight those developments likely to be of greatest interest to high net worth individuals and families.
Read the full article here.
Financial advisor Jordan Waxman of HSW Advisors has put together this list of the most important ways that the new tax reform could affect you:
- Individual State and Local Tax (SALT) deductions are gone
- Mortgage interest deductions are reduced
- Standard deductions are up, while itemized deductions are virtually gone
- Personal income tax rates are lower
- Estate tax rules are relaxed
- Business income from pass-through entities is taxed at lower rates — but it’s complicated
- Corporate tax rates are dramatically lower
Read about each of these items in depth here.