Tax Inflation Adjustments

It’s never too early to plan ahead!  While we are still in the midst of preparing 2018 taxes for April 2019, the IRS has just released several changes that will impact next year’s tax returns.  These 2019 tax year adjustments are to be used on tax returns filed in 2020 and were designed to adjust for inflation.  Some of the more relevant to the majority of taxpayers are described here.

To begin, the standard deduction increases for everyone.  For married filing jointly it rises $400, for single taxpayers and married individuals filing separately it goes up $200.  Heads of households will experience a $350 increase from the prior year.

Many other deductions, exemptions, and credits will realize various increases for tax year 2019 as well.  Among these are the Alternative Minimum Tax exemption, which sees both an increase in the exemption amount and the phase out dollar figure.  Additionally the Earned Income credit increases when filing jointly with three or more qualifying children. The amount allowed for qualified adoption expenses increases incrementally as well.  There will be no penalty for not having minimum health coverage in 2019.

As can be seen, the number of changes and the intricacies are wide ranging.  Over 60 tax provisions were adjusted for 2019. For a complete list of these tax inflation adjustments, the IRS website contains a detailed list.  Our office is open for questions as well.  While many of these increases are small, the amounts can add up depending upon your filing status and qualifications!


Sam Beiler: Boosting Your Business Marketing Potential!

Sam Beiler is a local business entrepreneur who understands the power of marketing at all levels.  He began his career as a roofing tech with B&E roofing. There he gained the hands on experience that allowed him to see innovations that would work in the roofing industry.  His next steps were with Equipter in manufacturing, sales, and director of marketing.  Equipter creates the machinery that enables the roofing industry to run a little easier.  

Sam has been an Equipter team member for 11 years.  Throughout this time he’s worked with roofers and general contractors to help them to market their business.  The thing he enjoys most about his experiences in business is helping individuals and companies reach their full potential and purpose.  Sam’s 3 years in sales at Equipter where very impactful in gaining experience and education in business. He has been able to take the knowledge and experience gained there to create his own marketing platform, Boostpoint.  

Boostpoint is a streamlined ad platform that helps local brands create, target, publish and measure digital ad campaigns to build a brand that generates more local business.  Boostpoint helps small businesses to generate more revenue with 1 streamlined platform. With Boostpoint’s help, your business can create, target, publish, and then measure your digital ad campaigns.  To learn more about Boostpoint, check out their informational video.  Sam enjoys photography and videography when he has spare time.  He has been able to utilize his hobby in videography to create documentaries about his journey with the Boostpoint start-up.

Sam shares his brand building strategies through marketing workshops and webinars.  If you would like to learn more about how he can help your business achieve greater potential, he can be reached at 717-983-4474 or sam@boostpoint.com.

 

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“ITP, LLC is supporting local small business owners through this post.  The experiences described are personal to particular users, and may not necessarily be representative of all users of the products and/or services.  We do not claim, and you should not assume, that all users will have the same experiences. Your individual results may vary. We are not affiliated with the organization referenced and are not paid or compensated for this publication.”

 


The TCJA and Its Impact to Farmers

Lancaster County is thankful for our rich variety of farmlands, from tomato to dairy with a bit of everything else in between.  The Tax Cuts and Jobs Act (TCJA) has brought about some tax reform changes for our farming neighbors. As many business sectors are experiencing, the changes come in the areas of accounting and depreciation.  Following are some of the pros and cons as outlined by the IRS.

Net Operating Losses can now be carried forward indefinitely as opposed to a previous 20 year limit.  However, these loss deductions are limited to 80 percent of taxable income. The TCJA allows more farms to utilize the cash basis of accounting for taxes.  This change is good for farmers with average annual gross receipts of $25 million or less in the previous three years. For more information on how tax reform impacts farmers accounting, the IRS provides detailed information on their website.

The TCJA also affects how farmers may depreciate their farming business.  The IRS defines depreciation best: “Depreciation is an annual income tax deduction. It allows a taxpayer to recover the cost or other basis of certain property over the time that they use it. When figuring depreciation, taxpayers consider wear and tear, and deterioration of the property, as well as whether it’s now obsolete.”

How does the TCJA alter this depreciation deduction?  The recovery period is now shortened from what was seven years to just five years.  Used equipment and several other categories do remain at seven years, but the switch to five years will have an impact.  At the same time, several positive changes were made to increase bonus depreciation percentages and to expand the definition of what qualifies for bonus depreciation.  Because the number of stipulations and scenarios are so great, we recommend and refer to the IRS site again for more detailed information on exactly what equipment and property is covered.  Still confused after reading all of that information? Our office and phones are open, give us a ring!