As we approach the end of the year, it is time to consider some tax planning opportunities that may be available to you for 2017. The planning points outlined below are not intended to serve as specific advice; you should always consult your D&H Group LLP advisor before implementing any of the suggestions contained in this newsletter.

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Article written by FGMK Tax Partner Charles F. Schultz III and Senior Tax Associate Jeffrey Golds

The Senate version of the "Tax Cuts and Jobs Act of 2017" includes a provision that would require taxpayers to use the first-in, first-out ("FIFO") valuation method with respect to any security sold, exchanged, or otherwise disposed of.  Specifically, effective January 1, 2018, taxpayers would be required to use the basis of the earliest acquired shares of any stock sold when determining capital gain recognition.   For many taxpayers, the earliest acquired shares also happen to be the shares with the lowest basis, resulting in greater capital gain recognition.

Read more: FGMK Tax Alert: The Senate Tax Proposal and an Important Year-End Capital Gain Planning Update

Domestic abuse often includes control over finances. An important part of managing finances is understanding one’s tax rights. Taxpayers have the right to expect the IRS to consider facts and circumstances that might affect the individual’s taxes.

Taxpayers have the right to:

  • File a separate return even if they’re married.
  • Review the entire tax return before signing a joint return.
  • Review supporting documents for a joint return.
  • Refuse to sign a joint return.Request more time to file their tax return.
  • Get copies of prior year tax returns from the IRS.
  • Seek independent legal advice.

Taxpayers also have the right to request relief from the liability shown on a joint return. This is known as innocent spouse relief. Here are a couple of examples:

Read more: U.S. Taxpayers Who are Victims of Domestic Abuse Should Know Their Rights

Contact: Tracy Monroe

It was awesome to speak on tax planning for individuals and businesses at the Ohio Society of CPA’s Cleveland Accounting Show this week. Like just about everyone, the group is anxiously awaiting the release of a detailed tax reform plan. There have been a number of recent signs that we should see one very soon.

As discussed in our September 29th blog, the Republican-led House Ways & Means Committee, Senate Finance Committee and President released the Unified Framework for Fixing our Broken Tax Code (Unified Framework). The Unified Framework is consistent with the prior vision outlined by the President and his advisors, and the GOP “A Better Way” blueprint — except this new proposal gives more details.

In other developments, earlier this week the House Democrats released their own framework for tax reform: “Real Reform for Real People.” Much like the Unified Framework, the principles in the Democratic plan are not aligned with specific numbers but instead focused on general goals. House Democrats want to strengthen the Earned Income Credit, Child Tax Credit, American Opportunity Tax Credit and Child Care Tax Credit. The proposal also includes a new tax credit for employers to train and hire new workers through apprenticeship programs and partnerships with community colleges and technical schools. This comes as the Republicans announce the tax reform bill will be released on November 1.

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As was done earlier this year, The Trump Administration, the leaders of the House Ways and Means Committee, and the Senate Finance Committee have released an ambitious proposal to reform the federal tax code, including reducing tax rates for businesses and individuals that, if passed, would amount to a sweeping change to the federal tax code. It purports to be economic growth, American worker and simplification oriented, but the proposal is a general outline with questions still remaining as to what may actually pass, what it will cost, and how this reform can be paid for if not revenue neutral. Rigorous debate is expected and much may, and probably will, change in the months ahead if and when the generalized proposal gets distilled into legislative language. That task will be left to the House and Senate Tax Writing Committees. In the meantime, this is still a good opportunity to review some of the principal features of the President's proposal, which include:

Read more: Trump Tax Reform: A Bold Proposal Short on Details