Slott

Tax Season Tips with Ed Slott

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With tax season in full swing, it can only mean one thing. It’s time for our annual chat with Ed Slott, the ultimate tax guru, and founder of IRA Help.

Here is your tax season boot camp for the first tax year of the Tax Cuts and Jobs Act (TCJA).

Itemized vs. Standard Deduction: Every taxpayer needs to determine whether it makes sense to claim one of these two deductions, both of which reduce the amount of income subject to tax. TCJA nearly doubled the Standard Deduction to $12,000 for Single and Married Filing Separately, $24,000 for Married Filing Jointly and $18,000 for Head of Household.

A couple of caveats on itemized deductions:

Your total deduction for state and local income, sales and property taxes is limited to a combined, total deduction of $10,000 ($5,000 if Married Filing Separate). Any state and local taxes you paid above this amount cannot be deducted.

The deduction for home mortgage and home equity interest was modified. It is now limited to interest you paid on a loan secured by your main home or second home that you used to buy, build, or substantially improve your main home or second home. So if you used a home equity loan or line of credit to pay off another debt, like a credit card or student loan, it would not be deductible.

There is a new dollar limit on total qualified residence loan balances. If your loan was originated or treated as originating on or before Dec. 15, 2017, you may deduct interest on up to $1,000,000 ($500,000 if you are married filing separately) in qualifying debt. If your loan originated after that date, you may only deduct interest on up to $750,000 ($375,000 if you are married filing separately) in qualifying debt.

Deduction for alimony is eliminated for agreements executed after December 31, 2018, or for any divorce or separation agreement executed on or before December 31, 2018, and modified after that date. In conjunction with this change, alimony and separate maintenance payments are no longer included in income based on these dates.

Claim Credits: Now that personal exemptions have been eliminated, credits are even more important.

The Child Tax Credit has increased to a maximum of $2,000 per qualifying child under the age of 17. Up to $1,400 of the credit can be refundable for each qualifying child as the additional child tax credit. In addition, the income threshold at which the child tax credit begins to phase out increased to $200,000, or $400,000 if married filing jointly.

There are two different education credits available: the American Opportunity Tax Credit (formerly Hope Credit), which is partially refundable, and the Lifetime Learning Credit. Both may apply to expenses you pay for yourself, your spouse and any dependents.Have a money question?

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Tax Season Tips + Can I Retire?

The PS reminder continues: If you enjoy the radio show, please subscribe to our podcast, Better Off.  It's very similar to the radio show and you'll hear more money calls with our awesome listeners.

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First up this week is Bruce from Illinois with a great question! "If money buys you freedom and options, when can you walk away from what you have to do and start doing what you want to do?" Not an easy one to digest so we kept Bruce around for two segments.

We rounded out the hour by continuing to chip away at the email inbox.

With tax season in full swing, it’s time for some much needed tax tips, dos and don’ts, and sage advice about IRAs and backdoor conversions.

As crazy as this might sound, you may want to enjoy this tax year while it lasts, because come next year, it’s going to get a whole lot crazier with all the changes to the tax code.

To help us make sense of it all we're joined by the Ed Slott, the ultimate tax guru, and founder of IRA Help.

While almost all of the changes go into effect next tax season, one big change occurs this year. If you itemize deductions on Form 1040, Schedule A, the new law allows you to deduct qualified medical and dental expenses that exceed 7.5 percent of your adjusted gross income (AGI) – that’s a lower threshold than the previous 10 percent. (The level returns to 10 percent beginning January 1, 2019.)

Medical care expenses is a big category and you should check out the IRS list, because it includes payments of fees to doctors, dentists, surgeons, chiropractors, psychiatrists, psychologists, and nontraditional medical practitioners, as well as insurance premiums you paid for policies that cover medical care or for a qualified long-term care insurance policy.

With new withholding tables in effect, the amount may not be enough to cover a lot of taxpayers, especially those in high tax states who could lose certain deductions. To be safe, at least for the first year of the new law, you may want to assume that your tax liability will be at least the same as this year. To avoid a penalty, you can pay 100 percent of your income tax liability from 2017 or 110 percent if you earn more than $150,000.

To get a better sense of your situation, be sure to check out the revised IRS withholding tax calculator on IRS.gov.

And oh yeah, once again, due to a Washington DC holiday (Emancipation Day), the filing deadline is delayed. Procrastinators, mark April 17th, rather than April 15th as your drop-dead date.

Have a finance related question? Email us here or call 855-411-JILL.

Connect with me at these places for all my content:

https://twitter.com/jillonmoney

https://www.facebook.com/JillonMoney

https://www.instagram.com/jillonmoney/

https://www.linkedin.com/in/jillonmoney/ 

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https://itunes.apple.com/us/podcast/b...

"Jill on Money" theme music is by Joel Goodman, www.joelgoodman.com.

Tax Season Tips with Ed Slott

With tax season in full swing, it’s time for some much needed tax tips, dos and don’ts, and sage advice about IRAs and backdoor conversions.

As crazy as this might sound, you may want to enjoy this tax year while it lasts, because come next year, it’s going to get a whole lot crazier with all the changes to the tax code.

To help us make sense of it all we're joined by the Ed Slott, the ultimate tax guru, and founder of IRA Help.

While almost all of the changes go into effect next tax season, one big change occurs this year. If you itemize deductions on Form 1040, Schedule A, the new law allows you to deduct qualified medical and dental expenses that exceed 7.5 percent of your adjusted gross income (AGI) – that’s a lower threshold than the previous 10 percent. (The level returns to 10 percent beginning January 1, 2019.)

Medical care expenses is a big category and you should check out the IRS list, because it includes payments of fees to doctors, dentists, surgeons, chiropractors, psychiatrists, psychologists, and nontraditional medical practitioners, as well as insurance premiums you paid for policies that cover medical care or for a qualified long-term care insurance policy.

With new withholding tables in effect, the amount may not be enough to cover a lot of taxpayers, especially those in high tax states who could lose certain deductions. To be safe, at least for the first year of the new law, you may want to assume that your tax liability will be at least the same as this year. To avoid a penalty, you can pay 100 percent of your income tax liability from 2017 or 110 percent if you earn more than $150,000.

To get a better sense of your situation, be sure to check out the revised IRS withholding tax calculator on IRS.gov.

And oh yeah, once again, due to a Washington DC holiday (Emancipation Day), the filing deadline is delayed. Procrastinators, mark April 17th, rather than April 15th as your drop-dead date.

“Better Off” is sponsored by Betterment.

Have a finance related question? Email us here or call 855-411-JILL.

We love feedback so please subscribe and leave us a rating or review in Apple Podcasts!

Connect with me at these places for all my content:

https://twitter.com/jillonmoney

https://www.facebook.com/JillonMoney

https://www.instagram.com/jillonmoney/

https://www.linkedin.com/in/jillonmoney/ 

http://www.stitcher.com/podcast/jill-... 

http://betteroffpodcast.com/

https://itunes.apple.com/us/podcast/b...

"Better Off" theme music is by Joel Goodman, www.joelgoodman.com.

Tax Season Tips with Ed Slott

Tax season is upon us. Here's a quick handful of tips with IRA expert and CPA, Ed Slott.

Subscribe to the Better Off podcast right now, because in a couple weeks there's going to be a whole lot more with Ed.

IRA, HSA, backdoor conversions, tax brackets, health care, standard deduction vs itemized...everything you need to know about tax season and the best way for you to file.

Have a finance related question? Email us here or call 855-411-JILL.

We love feedback so please subscribe and leave us a rating or review in Apple Podcasts!

Connect with me at these places for all my content:

https://twitter.com/jillonmoney

https://www.facebook.com/JillonMoney

https://www.instagram.com/jillonmoney/

https://www.linkedin.com/in/jillonmoney/ 

http://www.stitcher.com/podcast/jill-... 

http://betteroffpodcast.com/

https://itunes.apple.com/us/podcast/b...