The new Tax Cuts and Jobs Act (TCJA) includes numerous provisions designed to stimulate business growth, including changes in depreciation rules. A business entity can now write off the entire cost of qualified property the year it is placed in service. The following four changes may benefit businesses of all shapes and sizes:
1. Section 179's increased expensing limit
Under Section 179 of the tax code, a business can expense the cost of qualified property placed in service during the year. The TCJA doubles the expensing limit to $1 million and increases the phaseout threshold to $2.5 million. (Note: The maximum Section 179 deduction can't exceed the amount of business income.)
2. Increased bonus depreciation
The TCJA also authorizes a 100 percent bonus depreciation write-off for the cost of qualified property, doubled from 50 percent. This change is effective for property placed in service after Sept. 27, 2017. In addition, the new law expands the definition of qualified property to include used property acquired and placed into service at your company. However, the 100 percent bonus depreciation deduction is temporary. It begins to phase out after five years and vanishes completely after 2026.
3. Shortened real estate depreciation period
Generally, building improvements must be depreciated over a lengthy 39-year period. However, a faster 15-year write-off was previously permitted for qualified leasehold improvement property, qualified restaurant improvement property and qualified retail improvement property. The TCJA consolidates these provisions with the intent of providing a 15-year depreciation period for qualified improvement property.
4. Better business vehicle tax breaks
Luxury car rules limit the annual deductions a business can claim for business vehicles. Fortunately, the TCJA increases the business vehicle tax deduction limits for 2018 and thereafter. For instance, the maximum first-year deduction limit for a passenger car is multiplied by more than three, to $10,000 from $3,160. Plus, the vehicle may be eligible for an $8,000 bonus depreciation allowance.
We can help you learn more about these depreciation tax breaks and how they affect your situation. Give us a call today.

"Tax Tips" are published weekly to provide current tax information, tax-cutting suggestions, and tax reminders. If you would like more information on anything in "Tax Tips," or if you'd like to be on our mailing list to receive other tax information from time to time, please contact our office.
 
The tax information contained in this site is of a general nature and should not be acted upon in your specific situation without further details and/or professional assistance.
 
We are trusted CPA advisors servicing Burr Ridge, Hinsdale, Willowbrook, Darien, Naperville, and all Chicagoland area. 

Do you need assistance with your business and/or personal tax returns? Would you like to have a trusted source for your accounting, allowing you additional time to focus on increasing your business? Do you use QuickBooks, or plan to in the future, for your accounting? We include these in all our service packages, customized to fit your personal or business needs.   
 
We are currently accepting new clients. Your initial consultation is free, so you have nothing to lose and everything to gain. Our experienced staff is available to help you streamline your accounting, giving you more free time for yourself. Set up an appointment today by calling (630) 320-3720 or email us at [email protected]. 
 
For more free resources, such as Tax Rates, Tax Organizers, and Record Retention Schedules, access our website www.monarchaccountinggroup.com.

Monarch Accounting Group, Inc
145 Tower Drive, Suite 4
Burr Ridge, IL 60527
Phone (630) 320-3720
​

The new Tax Cuts and Jobs Act (TCJA) includes significant changes for individuals and businesses alike, enhancing some tax breaks and eliminating or reducing others. One new provision creates a new tax credit for employers who pay wages for family and medical leaves.

Currently, the new credit has a short shelf life, taking effect in 2018 and only lasting through 2019. However, there's a chance it will be extended by future legislation.

Eligible employers can claim a credit equal to a percentage of wages paid to qualifying employees on leave under the Family and Medical Leave Act (FMLA).

Here's how it works
The IRS has yet to issue official guidance, but here are some of the basics:

• To qualify for the credit, the employer must provide at least two weeks leave at a rate of at least 50 percent of regular earnings.
• The credit percentage ranges from 12.5 percent to 25 percent of the paid leave based on the amount of wages. For instance, the credit is equal to only 12.5 percent of the wages if the employer pays the minimum 50 percent of the regular pay rate, but gradually increases to a maximum of 25 percent if the employer pays the normal wages.
• The credit is available only for wages paid to workers employed at the company for at least a year who are paid no more than $72,000 annually in 2017, adjusted for inflation in future years.
• Family and medical leave must be offered to both full- and part-time workers.
• Employers need to have a written policy that includes two weeks paid leave for family and medical leave at 50 percent or more of wages for full-time employees. And the amount must be prorated for part-time employees.
• Leave that is paid for or required under state and local law shouldn't be considered when determining the amount of paid family and medical leave
provided by the employer.

No double dipping

Finally, if the employer claims the credit, they can't also deduct the wages as regular business expenses. Usually, the credit will be more valuable to employers than the deduction.
​
If you have questions about how this credit affects your situation, give us a call.

"Tax Tips" are published weekly to provide current tax information, tax-cutting suggestions, and tax reminders. If you would like more information on anything in "Tax Tips," or if you'd like to be on our mailing list to receive other tax information from time to time, please contact our office.
 
The tax information contained in this site is of a general nature and should not be acted upon in your specific situation without further details and/or professional assistance.
 
We are trusted CPA advisors servicing Burr Ridge, Hinsdale, Willowbrook, Darien, Naperville, and all Chicagoland area. 

Do you need assistance with your business and/or personal tax returns? Would you like to have a trusted source for your accounting, allowing you additional time to focus on increasing your business? Do you use QuickBooks, or plan to in the future, for your accounting? We include these in all our service packages, customized to fit your personal or business needs.   
 
We are currently accepting new clients. Your initial consultation is free, so you have nothing to lose and everything to gain. Our experienced staff is available to help you streamline your accounting, giving you more free time for yourself. Set up an appointment today by calling (630) 320-3720 or email us at [email protected]. 
 
For more free resources, such as Tax Rates, Tax Organizers, and Record Retention Schedules, access our website www.monarchaccountinggroup.com.

Monarch Accounting Group, Inc
145 Tower Drive, Suite 4
Burr Ridge, IL 60527
Phone (630) 320-3720

Tick, tick, tick … the deadline for filing your 2017 tax return is rapidly approaching. The traditional due date is April 15, but you technically have until April 17 to file your 2017 return. Why? April 15 is a Sunday and April 16 is Emancipation Day (a holiday in Washington D.C.).

Luckily, if you know you won't have time to file by April 17, you still have options. Simply file an extension (using Form 4868) by the April 17 deadline to get an automatic six-month filing extension to Oct. 15.

Of course, this is a lifesaver if you're behind, but a filing extension may also provide the following benefits:

• You can avoid late-filing penalties and interest charges that will apply if you do nothing.

• The extension can preserve a refund from a prior year's return. With it, the usual three-year refund statute of limitations is extended another six months.

• If you're self-employed, you have extra time to contribute to a SEP-IRA for the 2017 tax year, thereby lowering your 2017 tax liability.

• It allows you more time to make certain elections, such as claiming a Section 179 deduction for qualified business property placed in service in 2017.

• If you converted from a traditional IRA to a Roth in 2017, you can undo the conversion with a recharacterization up until the extension date. This technique has been eliminated for conversions after 2017 by the new tax law. A filing extension does not provide additional time to make IRA contributions for the 2017 tax year, however.

FYI: This is an extension to file your return, not pay taxes.
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If you think you'll owe money after filing, make a good-faith estimated payment of your tax bill by April 17. To avoid an underpayment penalty, pay at least 90 percent of your 2017 tax liability or 100 percent of your 2016 tax liability (110 percent if your adjusted gross income exceeded $150,000).

"Tax Tips" are published weekly to provide current tax information, tax-cutting suggestions, and tax reminders. If you would like more information on anything in "Tax Tips," or if you'd like to be on our mailing list to receive other tax information from time to time, please contact our office.
 
The tax information contained in this site is of a general nature and should not be acted upon in your specific situation without further details and/or professional assistance.
 
We are trusted CPA advisors servicing Burr Ridge, Hinsdale, Willowbrook, Darien, Naperville, and all Chicagoland area. 

Do you need assistance with your business and/or personal tax returns? Would you like to have a trusted source for your accounting, allowing you additional time to focus on increasing your business? Do you use QuickBooks, or plan to in the future, for your accounting? We include these in all our service packages, customized to fit your personal or business needs.   
 
We are currently accepting new clients. Your initial consultation is free, so you have nothing to lose and everything to gain. Our experienced staff is available to help you streamline your accounting, giving you more free time for yourself. Set up an appointment today by calling (630) 320-3720 or email us at [email protected]. 
 
For more free resources, such as Tax Rates, Tax Organizers, and Record Retention Schedules, access our website www.monarchaccountinggroup.com.

Monarch Accounting Group, Inc
145 Tower Drive, Suite 4
Burr Ridge, IL 60527
Phone (630) 320-3720
​

A new spending measure signed on Feb. 9 (the Bipartisan Budget Act of 2018) did more than avoid a government shutdown. It also extended about 30 tax breaks that had expired after 2016. Most of the extensions are retroactive to 2017, but last just one year, including these four:

1. Tuition and fees deduction: This deduction for tuition and related fees is claimed above the line in lieu of a higher education credit. The deduction is capped at $4,000 for single filers with adjusted gross income (AGI) of $65,000 or less ($130,000 or less for married joint filers) and at $2,000 for single filers with AGI of $80,000 or less ($160,000 or less for married joint filers).
Here's what to know: There are two credits that may be more valuable than the tuition and fees deduction: the American Opportunity Tax Credit (AOTC) and the Lifetime Learning Credit (LLC). The maximum annual AOTC is $2,500 per student and the maximum LLC is $2,000 per tax return. Credits are generally more valuable than deductions because they directly reduce your taxes, rather than just lowering your taxable income.

2. Mortgage forgiveness deduction: Usually, debt forgiveness creates taxable income, but the act reinstates a special exclusion for the cancellation of qualified mortgage debts of up to $2 million.
Here's what to know: This exclusion only applies to debt on a principal residence. It isn't available for a second home.

3. Mortgage insurance deduction: Homeowners can now deduct mortgage insurance premiums paid or accrued in 2017, subject to a phaseout above $100,000 AGI.
Here's what to know: Unlike mortgage debt forgiveness, this tax break can be claimed on one other home beside your principal residence.

4. Residential energy credit: This tax credit, which expired and has been revived many times in the past, is equal to 10 percent of the cost of energy-saving improvements installed in a home, such as a new furnace or central air conditioning.
Here's what to know: There's a lifetime credit cap of $500 (plus limits of $200 for windows and skylights). The $500 cap is reduced by credits claimed in prior years.

These tax breaks may be claimed on your 2017 tax return if you haven't filed it yet. If you've already filed, you'll need to file an amended return to benefit from them. Call us if you have questions.

"Tax Tips" are published weekly to provide current tax information, tax-cutting suggestions, and tax reminders. If you would like more information on anything in "Tax Tips," or if you'd like to be on our mailing list to receive other tax information from time to time, please contact our office.
 
The tax information contained in this site is of a general nature and should not be acted upon in your specific situation without further details and/or professional assistance.
 
We are trusted CPA advisors servicing Burr Ridge, Hinsdale, Willowbrook, Darien, Naperville, and all Chicagoland area. 

Do you need assistance with your business and/or personal tax returns? Would you like to have a trusted source for your accounting, allowing you additional time to focus on increasing your business? Do you use QuickBooks, or plan to in the future, for your accounting? We include these in all our service packages, customized to fit your personal or business needs.   
 
We are currently accepting new clients. Your initial consultation is free, so you have nothing to lose and everything to gain. Our experienced staff is available to help you streamline your accounting, giving you more free time for yourself. Set up an appointment today by calling (630) 320-3720 or email us at [email protected]. 
 
For more free resources, such as Tax Rates, Tax Organizers, and Record Retention Schedules, access our website www.monarchaccountinggroup.com.

Monarch Accounting Group, Inc
145 Tower Drive, Suite 4
Burr Ridge, IL 60527
Phone (630) 320-3720

The Tax Cuts and Jobs Act has grabbed the headlines in 2018. However, if you still have to file your 2017 tax return, it will generally be based on prior law. For example, you may itemize deductions under the old rules on your 2017 return, even though you expect to claim the standard deduction in 2018.

Here's a checklist of common errors for filers to avoid:

• Math errors. It's easy to do if you're crunching the numbers yourself. Even if you rely on software, you still must enter accurate figures. Double- and triple-check all the figures on the forms to ensure you got them right.
• Misspelled or incorrect names. You'll need to file your taxes using the current names that match official records for yourself, your spouse and dependents. If a name changed because of marriage, be sure the name change is filed with the Social Security Administration before you file.
• Wrong bank account numbers. If you're using direct deposit for a refund and you use the wrong account numbers, your refund may be delayed a long time. Remember, check those numbers!
• Forgotten 1099s. For savings accounts and investments, you should have received 1099-INT and 1099-DIV forms. Ditto for 1099-MISCs from side jobs or self-employment. Make sure to account for income by using those forms or you may face penalties.
• Mistaken assumptions. For instance, if you're married, you may assume that filing jointly is the best option, but that's not always the case. We can help answer your questions about your filing status.
• Omitted Social Security number. While many people are wary of giving out this sensitive number, it's vital to claiming certain tax breaks like the child tax credit or a higher education credit. Understand that precautions are made to keep your information secure.
• Missed charitable contributions. This deduction is often a big-ticket item for itemizers. Make sure you're claiming the full amount you're entitled to.
• Forget to sign. This final step in completing the return is critical for both paper and electronic filers. Make it a point to review all your forms and check for needed signatures.

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We can help you maximize the available benefits, while minimizing potential problems like those above. To help with the process, organize your records, receipts and other tax return information so you'll have everything we need when you come in to our office. Give us a call if you have questions.

And don't forget: The tax return filing deadline is April 17. Make your appointment now, and let us know if you need more time to file your return.

"Tax Tips" are published weekly to provide current tax information, tax-cutting suggestions, and tax reminders. If you would like more information on anything in "Tax Tips," or if you'd like to be on our mailing list to receive other tax information from time to time, please contact our office.
 
The tax information contained in this site is of a general nature and should not be acted upon in your specific situation without further details and/or professional assistance.
 
We are trusted CPA advisors servicing Burr Ridge, Hinsdale, Willowbrook, Darien, Naperville, and all Chicagoland area. 

Do you need assistance with your business and/or personal tax returns? Would you like to have a trusted source for your accounting, allowing you additional time to focus on increasing your business? Do you use QuickBooks, or plan to in the future, for your accounting? We include these in all our service packages, customized to fit your personal or business needs.   
 
We are currently accepting new clients. Your initial consultation is free, so you have nothing to lose and everything to gain. Our experienced staff is available to help you streamline your accounting, giving you more free time for yourself. Set up an appointment today by calling (630) 320-3720 or email us at [email protected]. 
 
For more free resources, such as Tax Rates, Tax Organizers, and Record Retention Schedules, access our website www.monarchaccountinggroup.com.

Monarch Accounting Group, Inc
145 Tower Drive, Suite 4
Burr Ridge, IL 60527
Phone (630) 320-3720
​