I own a business and live in a high tax state. I expect to pay more! I don’t qualify for the sub s 20% tax rate because of my earnings and the type of business I own. Not a happy camper here! Edited to say: I am divorced so I am a single filer.
H and I will have the standard $24K, plus $500 for S17. I am losing the deductions for the two middle boys, who still live at home and for whom I provide more than 50% of their support. Fortunately, the two oldest kids phased out over the past couple of years, so I wasn’t counting on having them as exemptions any more.
Our property taxes far exceed the $10K, though I pre-paid quite a bit of the 2018 taxes, so they are not as high as usual, and we have had $6K+ in out of pocket medical, so I have to figure out what is better for us this year. I am not certain what other deductions still exist.
H is self-employed as an attorney/real estate broker and his earnings are clearly below the threshold numbers for this year, so we may get that 20% break.
We bought an investment property earlier this year and I am not certain if we should put it into a corporate name to get the 20% deduction and/or how I can maximize my tax benefits. We purchased it with a life estate tenant in there. The law in our state is that the life tenant is responsible for taxes, homeowner’s insurance and maintenance, but the reality is that we were able to acquire the property because the former owner-now tenant was losing it for unpaid taxes and they still can’t pay them, so I am. I am hoping that due to the circumstances, I will be able to deduct at least part of the taxes and upkeep.
We are extremely fortunate in that a good friend of ours, who is a JD-CPA, does our taxes for us. I have already started getting the paperwork ready to send him as soon as I get my W-2.
I believe that I will have to pay taxes, even though I did do an adjustment on my W-4.
We are trying to decide whether…or not…to pay our December installment of property taxes before the end of the month. I’m not sure it all matters, but that’s the only grey area we have.
We will most definitely have higher taxes than previous years, and will likely owe rather than get a refund. Whatever. It is what it is…unless we win Powerball someday ?
If, and that’s a big if, we pay anything less in taxes this year, it’ll be made up in paying more to our accountant.
BIL, who’s a CPA, thinks most of us will be unpleasantly surprised when we do our taxes.
I think we will pay less tax this year. For the first time in my life, local and state tax will exceed the federal income tax. It used to be that local and state tax were negligible compared to federal tax.
@techmom99 Wouldn’t taxes paid on an investment property ordinarily be taken off as an expense on Schedule E?
If the investment property is used as a rental then yes. If not it would be a schedule A deduction.
Whether schedule E rental income is eligible for the 20% QBID deduction will depend on various factors.
We have already done several webinars about the new tax laws and the QBID makes my head want to explode. We have 2 days of tax classes (live in person ones so hopefully can ask lots of questions) and I’m hoping things will be clearer.
New here, as I stumbled across this thread via searching google. I hope I am posting this in the correct place.
We have a son attending college. We claim him as a dependent, so we also claim his educational stuff. In 2018, he won a $4500.00 scholarship award. The foundation reported it on a 1099-MISC, under box 7. This was not income, nor did he do any work for receiving the scholarship. If it matters, that money is more than what expenses we had, as he is currently taking community college courses, which aren’t expensive.
As I said we claim him on our taxes. I am told that he must file his own return claiming the $4500. The IRS said that it doesn’t matter if it was scholarship money or not, unless we got the foundation to issue a correct statement, we should file it as misc. income. With that said, they said he would not be required to file a return, since the amount was under $4850. I did do turbo tax for him prior, putting it in as misc income. Turbo tax calculated that he would need to pay $345.
So do we pay attention to what the IRS guy said and not file it at all or do we file with an e-service and go ahead and pay the IRS money ($345.00 according to turbo tax), and be done with it?
Now remember, we are claiming him on ours. Right now, without that money reported, we are getting back $2000. We cannot add it under our on our taxes. If we were to put it under scholarships, it would reduce our refund by $2000, but that wouldn’t be the correct reporting, according to the IRS guy. He says it must be reported as misc income. I don’t feel right about not reporting it, but how do I do that and follow the IRS guidelines, when they say he would report it as misc income, but doesn’t need to file because it doesn’t meet the minimum.
There was just another thread on this. Search around for it (1099-Misc income and how to report).
It is definitely your son’s income and should NOT be added to your (parent’s income). If you enter it on turbo tax as a scholarship for which you didn’t receive a 1098-T, turbo tax will generate the correct increase to the standard deduction (up to $12000) because for purposes of scholarships, the income is considered earned income. It appears that 1099-Misc income doesn’t do that on Turbo Tax.
If you do that, keep good records. If the IRS audits your son, he can show that he did include that income on his return.
Thank you. I assume though that if he enters it as a scholarship on his return, then we lose out on the educational credits on our return, correct? That’s like a $2,000 difference for us and it would no advantage to him on his side, since he can’t take the educational credits. Can I just show it as misc income and pay the money to be done with it, meaning it wouldn’t show up as a scholarship, but income?
You might find your answer in this thread.