Tax News

The New QBI Deduction = Huge Tax Savings

The New QBI Deduction = Huge Tax Savings

by: Mike Ward, EA

The Qualified Business Income (QBI) Deduction is a game changer for small business! In its basic terms the deduction is 20% of business income.  “Wow” is what we should be thinking on this deduction.  It will include most individuals who have income from the following:

  • K1 income from 1120S SCorps & 1065 Partnerships
  • Schedule C Sole Proprietors
  • Schedule E Rental Properties
  • Schedule E Other Rental Activities
  • Statutory Employees
  • Schedule F Farm income

There are details to this deduction and each situation is different. See a tax professional this year so you can take advantage of this once in a generation Tax Deduction.

 

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TAX REFORM

How will tax reform affect you? Contact a local tax expert today!

The Tax Cuts and Jobs Act is the largest change to the tax code since 1986.  This bill will be effective for the 2018 tax year and beyond.  For the vast majority of  taxpayers this means they will not see a change in there taxes until they file a return in early 2019. Below are a FEW key changes that will impact the majority of our clients.

Individual,  Married Filing Joint,  and Head of Household Filers:

  • Lower tax brackets for the large majority of filers.  (new brackets listed below)
  • Doubling (approximately) of the standard deduction from to $12,000 for individuals and $24,000 for married filing joint, and $18,000 for head of household.
  • Doubling the Child Tax Credit to $2,000 per child.
  • Add the 529 savings accounts for child education savings (was a Maryland State deduction not federal deduction).
  • 20% deduction on “pass-through” income for most S-Corps and Partnerships.
  • Repeal of the Affordable Care Act’s individual mandate beginning 2019.
  • Elimination of the interest deduction on home equity loans.
  • Elimination of most itemized deductions OTHER THAN home mortgage interest, state and local taxes, property tax, charitable deductions, and medical deductions.
Tax Rate Income Range for Individuals   Income Range for Married Joint Filers
10% $0 – $9,525   $0 – $19,050
12% $9,526 – $38,700   $19,051 – $77,400
22% $38,701 – $82,500   $77,401 – $165,000
24% $82,501 – $157,500   $165,001 – $315,000
32% $157,501 – $200,000   $315,001 – $400,000
35% $200,001 – $500,000   $400,001 – $600,000
37% $500,001 and Up   $600,001 and Up

Businesses: SCORPs, PARTNERSHIPS

The new tax code favors these structures with a 20% deduction on pass through income.  Please call OC Tax today and see if your business could benefit by converting to a  “Pass-Through” entity structure.

This is a brief description of key points that effect our clients and potential new clients, we will being updating the information in the coming weeks.

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More than a tax service!

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Tax Help!

Tax Help!

by: Mike Ward, EA

 

Finding yourself bogged down with tax problems?

Do you feel like you are unable to properly explain your unique situation to the IRS and other government agencies? Have these agencies become relentless on their collections?

Or maybe you just have questions regarding your new business?

Well you are not alone!

A clear path out of complicated tax situations can feel daunting.  Finding sound tax advice from your local tax professional can make the process of reconciliation much less financially and emotionally trying. OC Tax Service specializes in these exact situations.

Below are some of the most common tax situations and the ways OC Tax can help tackle these tax problems:

 

Timely filing your individual 1040 tax returns and/or your business (1120, 1120S, 1065) tax returns.

  • OC Tax Service specializes in Individual and small business tax filing and will help you get caught up on your personal and business tax return filing. If you have back tax debt the IRS will not negotiate until all due tax returns are filed.
  • OC Tax Service will guide you through penalty relief and offer and compromise options that the IRS offers.

 

Tax filing for 1099 income or independent contractor income. If you are a new or seasoned independent contractor and you are not properly preparing for income tax liabilities then you may be headed for, or already in “tax trouble”. You may need tax help.

  • OC Tax Service can help you take full advantage of all the tax deductions you are entitled to under the current tax code. After all the deductions are considered we will set up an estimated tax payment plan that will avoid large unexpected tax obligations at the end of the year.
  • Tax filing for 1099R. Early IRA distributions are taxed and penalized differently than other investments. The tax implications should be reviewed thoroughly before these tough decisions are made. If you are considering taking early distributions, or are unsure how your retirement will be taxed, than you may need tax advice from a tax professional.
  • At OC Tax Service, we have seasoned tax professionals available to explain any tax situation. We will discuss the tax implications of an early distribution from your IRA and the exceptions that may or may not apply to these rules.

 

Incorrect withholding on your W2 or 1099R. Setting up the proper withholding on your W2 or 1099R may keep you out of tax trouble and possibly save you from many tax headaches and tax problems.

  • OC Tax professionals can explain the different withholding on tour W2 or IRA and help you decide what is best for your unique situation.

 

Call OC Tax Service today and speak with of our knowledgeable Enrolled Agents or Registered Tax Preparers. (410)973-2742

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OC Tax Service serves customers on Racetrack Rd.

By Kara Hallissey | Feb 23, 2017

Photo by: Kara HallisseyMike Ward and Mary Ann Jordan help clients with all tax service needs on Racetrack Road in Berlin with their OC Tax Service business.

(Feb. 24, 2017) OC Tax Service kicks off its first season on Racetrack Road after Mary Ann Jordan and her two sons Mike and John Ward have served the community since 2003.

“Most of our business is developed from word of mouth. Our clients are loyal,” Mary Ann Jordan said. “They keep coming back and refer people to us. We have great clients.”

All kinds of tax services are available for individuals, families, students, corporations and small businesses. There are two notaries on site in addition to payroll services and tax consultations offered.

“We care and pride ourselves in trustworthiness,” Jordan said. “Clients trust us and that is why we are so highly recommended. We try to always create a trustworthy environment.”

OC Tax Service has a state-of-the-art system for secure backup, which encourages clients to go paperless by offering PDF files and a free jump drive of their taxes. Hard copies are also available. Fast and no interest loans can be attained based on refunds.

“We are sensitive to the security of information we hold here,” Jordan said. “We are developing a system to help other companies backup their files securely.” The system is slated to be up and running by the spring.

Bookkeeping services include preparing income statements, balance sheets and financial reports for customers in addition to settling bank accounts and accounting books. There is no financial planning.

“We personalize to what a company’s needs are and explain what happens when money is taxed,” Jordan said. “Combined, we [Mary Ann and her two sons] have more than 25 years’ experience in preparing personal and business tax returns, primarily in Maryland and Delaware. We also have the capability for preparing taxes in all states.”

The tax business was located on Golf Course Road for 13 years before moving in October to Racetrack Road.

“We are constantly educating ourselves about the changes in the tax environment,” Jordan said. “Come in and talk to us. We can go over your needs and set up a plan with a free consultation.”

OC Tax Service, on Racetrack Road in Berlin, is open Monday through Friday from 9 a.m. to 6 p.m. and on Saturdays from 9 a.m. to 5 p.m. Call 410-973-2750 or 410-213-8344 to make an appointment after hours. Walk-ins are welcome.

Clients can also schedule online using a booking system at www.oceancitytaxservice.com.

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