Plan today for a brighter tomorrow
The impact of last year’s significant overhaul of the tax code (the “Tax Cuts and Jobs Act of 2017” or TCJA) continues to unfold in various ways. AKM’s 2018-2019 tax guide, prepared by a trusted third-party partner, provides a tremendous amount of insightful information on a wide range of topics. We encourage you to download the guide and review the sections that are relevant for you, then schedule time with your AKM CPA to do some proactive, strategic tax planning. We cannot stress enough that the fundamental changes incorporated in the TCJA make tax planning more essential than ever for most taxpayers. Your AKM CPA is available to help you navigate these changes and safeguard your longterm financial well-being.
Contents of the 2018-2019 Tax Planning Guide
Year-to-date review [Page 2] – An overview of how the TCJA could impact your tax planning, including strategies for avoiding the Alternative Minimum Tax trap. Helpful summaries:
- Chart showing itemized deductions that are also deductible for AMT purposes
- Overview of changes to personal exemptions, standard deduction and itemized deductions
- Review of individual deductions affected by the TCJA
- Note on how updated withholding tables can cause underwithholding
Executive Compensation [Page 6] – Strategies for crafting a tax-efficient total compensation package, including restricted stocks, RSUs, incentive stock options, nonqualified options and NQDCs. Helpful summary:
- A new opportunity for tax deferral provided by TCJA
Investing [Page 8] – A detailed summary of tax considerations when buying and selling investments, including an overview of the 3.8% Net Investment Income Tax (NIIT), timing to minimize capital gains taxes, the wash sale rule, loss carryovers, the 0% rate, mutual funds, small business stocks, passive activities, income investments and investment interest expense. Case studies and summaries:
- How to qualify for the 0% capital gains rate.
- Tax-exempt or taxable bonds? It’s a question of yields.
- Chart: Maximum 2018 capital gains tax rates
Real Estate [Page 12] – Overview of how the TCJA impacts real estate investments, including various limitations on deductions enhancements to depreciation-related tax breaks and changes to the interest deduction for business. Summary:
- How the TCJA limits interest deductions
Business ownership [Page 14] – A discussion of the challenges business owners face due to the TCJA, including how taxes on business income will change, new limits on business loss deductions, and the ongoing challenge of retirement savings, as well as some pointers on exit planning and on sale or acquisition of a business. Summaries:
- Chart comparing eligible contributions for profit-sharing plans vs. SEPs.
- Overview of the new deduction for certain pass-through entities
Charitable giving [Page 16] – A discussion of how to leverage the flexibility of charitable contributions in your tax planning (charitable deductions are largely unchanged by the TCJA). Summary:
- Overview of allowable deductions for various types of donations.
Family and education [Page 18] – An overview of how families can put the younger generations on a sound financial footing—and plan ahead for the impact of the TCJA on the “kiddie tax.” Summary:
- Overview of a new tax-saving opportunity for some higher income families under the TCJA
Retirement [Page 20] – A summary of tax issues associated with contributions to and withdrawals from various types of retirement accounts. Summaries:
- Chart showing 2018 regular and “catch up” contribution limits for various types of retirement plans
- Notice that Roth IRA conversions can no longer be undone
Estate planning [Page 22] – Overview of enhancements incorporated in the TCJA, as well as effective strategies for building enduring family wealth. Summary and case study:
- Chart showing transfer tax exemptions and rates
- Case study: Now’s the time to create a dynasty
Tax rates [Page 24] – 2018 individual, corporate and trusts and estates income tax rate schedules.