Category Archives: Tax Issues

Tax hikes in the new “tax cut” bill

The Republican tax bill has a series of tax hikes that individuals need to be aware of in 2018 and going forward.

#1: No deduction for interest on home equity line debt used for personal purposes: Most taxpayers have been able to borrow as much as $100,000 against the equity in their homes, use the money for personal purposes, and deduct the interest on their taxes.

No more. The “Tax Cuts & Jobs Act” eliminates the deductibility of interest on home equity line debt that is not used for home improvements. What’s more, this change is retroactive, applying to equity line debt taken on before 2018 as well. So if you’ve taken out a HEL or second mortgage, you now have to keep track of how much of the money was used for improvements, and deduct the interest on only that amount. So much for “tax simplification.”

#2: No deduction for local business meals and entertainment. Whether it’s lunches with clients, breakfasts with peers in your industry, business dinners with experts in your field, it doesn’t matter. All local meals are now disallowed business deductions. Just about the only exceptions are meals provided for the convenience of an employer and meals when people have to spend the night out of town while traveling on business (in both cases, 50% deductible).

Watch this space for regular additions to the list of new tax hikes and challenges.

“Nightmare” Republican tax bill brings year-end chaos for homeowners

Homeowners across the country looked to battle the coming $10,000 cap on state and local tax deductions by paying their 2018 property taxes in advance. Now the IRS has announced that only property taxes that have been assessed can be deducted in 2017. The announcement did little to clarify who can take a deduction now… Continue Reading

Could Trump tax bill trigger a housing crash?

Reducing or eliminating the deductions for state and local taxes won’t just cost some people money in terms of increased taxes. The Republican bills could also push down property values, attacking the most valuable assets many families have. As The New York Times reported,”An analysis of the Senate bill by Moody’s Analytics concluded that home… Continue Reading

ObamaCare tax prep requirements are catching subsidy recipients unaware

The Affordable Care Act made preparing and filing tax returns even more complicated last year (I know, you’d think that wasn’t possible) because of the gymnastics involved in running health insurance subsidies and credits through the tax code. Now we’re learning that thousands of people might lose their health insurance subsidies because they didn’t file… Continue Reading