There is still time to make a tax plan for 2019. The Tax Cuts and Jobs Act (TCJA) and market appreciation in 2019, will all affect your taxes. Here are a few things to discuss with your financial advisor and CPA before the upcoming tax filing deadline.
Cost Segregation for Real Estate:
If you own a real estate, cost segregation enables you to accelerate depreciation from 39 years to as less as 5 or 7 years and generate significant tax savings in both active and passive income.
The Tax Cuts and Jobs Act (TCJA) in 2018 allows 100% first-year bonus depreciation. Now you can write off 100 percent bonus depreciation in the year of purchase of your car if it is being used for business purposes.
Health Savings Account (HSA) Contribution
If you have a high deductible insurance plan ($1,400/individual or $2,800/family), you are eligible for a health savings account (HSA). You can contribute up to $7,000 pretax for a family until April 15, 2020.
Qualified Business Income (QBI) for Rental:
Under the TCJA, you may be eligible for qualified business income (QBI) deduction for rental income. For active rental property, you can deduct up to 20% of your QBI on your taxes.
Qualified Business Income (QBI) for Personal Income:
The TCJA established a new tax deduction for owners of many pass-through businesses i.e. sole proprietorships, partnerships, and S corporations. Architects and engineers are generally eligible for the 20% deduction of QBI.
Student Loan Payment Deduction:
You can deduct up to $2,500 of interest paid on student loans. There are income limitations that apply which you should discuss with your financial advisor.
Backdoor Roth Conversion:
Backdoor Roth IRA is a great way to defer funds for your retirement account. You can contribute into a traditional IRA and convert it to a Roth IRA without regards to usual income limitation.
Simplified Employee Pension Individual Retirement Arrangement (SEP IRA):
Business owner can utilize a SEP IRA to provide retirement benefits for themselves and their employees. Employers can contribute up to 25% of the salary they pay for each employee.
Individual Retirement Account (IRA) for 2019:
An individual over 50 can contribute up to $7,000 into traditional and/or Roth IRA accounts for tax-year 2019.
The TCJA doubled the child tax credit (CTC) to $2,000 per child under 17 years of age. There have been changes made for both credit and exemption for dependents and other changes to consider for families with children.
Stock Market Loss:
Stock market losses or capital losses can be applied to reduce your taxable income. To get the most tax benefit, you must strategize how to deduct your losses in the most efficient way.
There are always many changes to consider come tax season. Whether it be changes in your family’s life, or changes with the tax law, it is important for your financial future to make sure everything is taken into consideration. Everyone’s situation is unique, and it is vital to speak to a fiduciary financial advisor who can help make a good tax plan for 2019 and beyond.
About Wall Street Alliance Group
Wall Street Alliance Group is a nationally recognized wealth management firm headquartered in Manhattan, New York. The firm operates on a Fiduciary capacity serving high net worth clients and is on a mission to empower first-generation immigrants achieve financial well-being. Wall Street Alliance has a team of advisors with expertise in areas such as Tax Planning, Estate Planning, Asset Protection, Portfolio Management, 401(k) plans, Defined Benefit plans, Special Needs planning, Physician Financial planning and Trust services.
Please visit www.wallstreetag.com.
Securities America and its representatives do not provide tax or legal advice; therefore, it is important to coordinate with your tax or legal advisor regarding your specific situation. The opinions and forecasts expressed are those of the author and may not actually come to pass. This information is subject to change at any time, based on market and other conditions and should not be construed as a recommendation of any specific security or investment plan. Past performance does not guarantee future results.Securities offered through Securities America, Inc. Member FINRA/SIPC. Advisory services offered through Securities America Advisors, Inc. Wall Street Alliance Group is not affiliated with the Securities America companies.
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