The TCJA and You

With less than a month to go in the tax filing season, many Americans have already seen the effect that the Tax Cuts and Jobs Act (TCJA) is having on their bottom line.  In practice for the first time since being approved in December 2017, this new tax act is impacting everyone. Many people are finding minor decreases in their refunds or increases in their payment due.  Tax preparers are spending a little more time working through questions and concerns with clients. So who is being impacted and what, if anything, can you do to improve your situation for next year?

TCJA and you Photo by Sharon McCutcheon on Unsplash

The biggest impacts are to those with children and those who typically itemize deductions.  Homeowners are seeing a definite change in tax refunds as well. The variation to your tax return depends upon so many different details it is almost impossible to give examples of every one.  Filing status, income level, number of dependents, and whether or not you own a home all come into play in a variety of ways. Here are some common areas that are impacting most people.

The elimination of the personal exemption touches everyone but hits families the most.  At $4,050 per person, for a single taxpayer, this might not be a big deal. But for a family of 4 – this means $16,200 MORE of your income is taxable since the personal exemption is gone.

However, the increase in the standard deduction does a good job making up for the personal exemption loss.  At $24,000 for couples filing married and $12,000 if you are a single filer, this increase is all but equaling out the personal exemption for many.  The child tax credit has increased, further helping families. An additional equalizer in many cases is the lowered income tax rates across tax brackets.  

The net result of these changes is bringing many taxpayers within  close range of how their 2017 tax refunds looked. However, the end of itemized deductions is an area that is also having an impact.  Homeowners are especially noticing a change in their bottom line. How much you can deduct for home mortgage interest and home equity loan interest has been limited. Under the new tax laws, the amount you can deduct for state and local tax deductions is $10,000. This hurts taxpayers who would itemize their state and local income, property, and general sales tax payments on their federal tax returns. The TCJA eliminates the deduction for home equity loans.

So how do you prepare for next tax season?  The IRS continues to recommend doing a paycheck check-up.  The IRS has all the tools to complete a check-up on their website.  It’s also a good idea to talk to a financial advisor or tax preparer to plan ahead for next year.  If possible, wait until after the filing deadline when your tax preparer has time to sit down and think.  We would be happy to help!


Protecting Yourself this Tax Season

Every tax season brings a new post on how to avoid scams.  Redundant but relevant, as this is the time when scammers prey on taxpayers.  We provided some basics last year in Tax Scams.  If you don’t have time to read much further, know these basic tips:

  1. Never give out your Social Security Number to someone who calls you.  Ever.
  2. The IRS will never contact you by phone to demand money.  Ever.
  3. The IRS will not threaten  police action or ask for credit/debit card numbers over the phone
  4. The IRS will not call about an unexpected refund.  You are being scammed.

The IRS will communicate by letter through the mail.  If you need to contact them, they can be reached at 800-829-1040.  The IRS Is protecting consumers in several ways, so when you place that call be prepared to supply:

  • Social Security numbers or ITIN and birth dates for anyone on the tax return
  • Filing status
  • A copy of the tax return in question
  • Any IRS letters or notices received by the taxpayer

If you are contacting the IRS on behalf of another person you will need to complete Form 8821 and Form 288.  These will give Power of Attorney and Tax Information Authorization. If the other party is deceased then a copy of the death certificate and Form 56 are required.

What do criminals do with the information they steal?  Withdrawing money from bank accounts and using credit or debit cards for purchases are among the typical crimes.  Also common are selling the stolen information or filing a fake return io claim the money. Knowing how the stolen information is used, there are several important steps to take immediately after you suspect you’ve been victimized to minimize damages

  1. Figure out what information was breached.
  2. Utilize credit bureaus to determine the extent of the damage.
  3. Contact credit card companies and your bank to re-establish new accounts and freeze old ones.
  4. Reset all passwords.

For more information about protecting yourself and your investments, visit Tax Scams and Consumer Alerts.


Gambling and Tax Laws

If games of chance such as poker, horse racing, or playing the lottery are among your recreational hobbies, the new tax law brought some minor changes.  The IRS website includes a description of changes as they relate to each type of gambling.  It is the best place to verify current and future tax law plans, but the two biggest impacts are described below as well.

How Gambling Affects Taxes

The change that affects the most gamblers and therefore is the one most talked about, is how losses can be deducted.  While many types of itemized deductions were eliminated under the new law, gambling losses are still allowed! The change to these deductions is that they can only be deducted to the extent of gambling winnings for that tax year.  

At year-end, calculate all your losses.  Everything from non-winning lottery and bingo ticket costs to money spent and lost on slots.  You can then claim an itemized deduction for all these betting losses throughout the tax year, against your winnings.  For example, if you spend and lose $10,000 and win $9,000 during the year, you could deduct for the $1,000 difference.  If you lose $10,000 and win $11,000 you would be responsible for taxes on the $1,000 difference.

The increase in the amount of the standard deduction may make it more attractive to many taxpayers over taking itemized deductions.  Gamblers too may find taking the standard deduction a more beneficial decision than itemizing losses. If your losses are greater than the standard deduction amount than itemizing is likely your best choices.  Otherwise, take the standard deduction or talk with your tax preparer.

The tax law also includes changes for professional gamblers.  Expenses for travel, lodging, food, and the like are lumped in with losses now for deduction purposes.  These expenditures can no longer be separately itemized. Small time gambling hobbyists will be the ones most likely to still see returns under the new law, while gambling professionals are not going to be so lucky.

Do you have additional questions about gambling under the new tax law? Contact our office today and we will get you the answers……you can bet on it!


Get in Shape with Bull Ridge Fitness

Daylight savings time is, thankfully, upon us.  The days are getting longer, warmer and people are beginning to think about getting in shape for summer.  If you are looking for a great way to tone after a long cold winter, check out Bull Ridge Fitness, LLC.  Conveniently located in Willow Street, Bull Ridge is celebrating 2 years in business this week!  

Gym owner, Chris Martin, has been cross training for 8 years and during that time did some coaching at a local gym. When that gym went out of business, Chris continued working out at her home.  What began as working out with friends in her garage expanded into a business with many loyal customers. Chris shares that her favorite part of her job is helping people change their lives for the better.  She says of Bull Ridge, “Our mission is MOVEMENT. For each person that is at a different level. We meet you where you are at and make amazing things happen. We build strength in functional movements.”

Bull Ridge is a group training facility which offers the advantages of personal training in a team environment.  Each individual completes the same workout at their own level. Everyday brings a new 1 hour long workout. This time includes a warm-up, skill/strength, workout of the day (WOD), and mobility/stretching.

We know that joining a gym can be daunting for many reasons.  Bull Ridge offers a 1 week free trial so customers can come make sure that the fit is right for them.  We’re pretty sure you will want to stay! To get in touch with Chris directly her email is chris@bullridgefitness.com  The gym can also be reached at 717-587-5629 and their website is well designed to help answer many of your questions!

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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.”


Welcome Home With Lancaster Transplant

Being new to an area can be hard.  How do you meet up with people who share the same interests when you are in an unfamiliar home?  Where do you go for the best Mexican food and a fun scene? This is where Jocelyn Park and Lancaster Transplant can help.  Jocelyn began Lancaster Transplant five years ago and the group has grown in many positive directions since then.  

Lancaster Transplant offers the community a way to get connected to their new home and neighbors.  This organization is open to ANYONE who is looking to meet new people, not just Transplants to our area.  Their website has a wealth of information available, including what being a member entails.  Transplants meet up regularly for drinks, bike rides, field trips and other fun adventures.

Jocelyn came to Lancaster with undergrad and graduate degrees in Design.  Her experience as a transplant to Lancaster, combined with her design expertise, help in dreaming up big ideas  As a visionary, she enjoys leading a team of talented people to figure out how to bring these plans to fruition.  The Lancaster Transplant team is constantly thinking of ways to make people feel more at home in Lancaster. Interested in making connections of your own here in Lancaster?  You can call Lancaster Transplant at 717.925.0562 or email at hello@lancastertransplant.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.”


Starting Over: Career Change

A growing trend in today’s job market is for workers to change careers at least once.  There are a multitude of explanations for these changes. A big reason is being able to try out a career that didn’t exist years ago.

Technological fields such as social media and cyber security are some of the largest growing areas. Another reason for increased job switching is the rate that companies are downsizing, closing, or relocating.  

Initially upsetting, these misfortunes can lead to great opportunities to look in a new direction! Many women who return to the work world after having children find that having a schedule that coordinates with their kids’ school schedules is more important than making big bucks. Still, others find themselves at the other end of parenting after children have moved out.

Now can be the time to take on the new career that you’ve been wanting to try but were worried about job security as you raised a family. Perhaps you don’t need quite as much income, as many work hours, or the stress that comes along with all of that.

Even as the career change trend shows an increase, surveys show that while a large percentage of older workers wish to change careers for many of the reasons mentioned, less than 10% of them will make a change.  However, the vast majority of those who do make the switch report being very satisfied and successful in their new career. So how do you successfully make the switch?

Talk to family, friends, and professionals in the new career. LinkedIn is a well known online tool for meeting and talking with professionals across job sectors. Career counselors can also be a valuable asset. List the skills, training, perspective, and experience that you’ve acquired over the years that can make you valuable in a new position.  Research what additional training you would need to enter the new field. An online search of available training is a great place to start as is talking to those currently working in your desired field.  

If you are someone who tends to be adverse to risk, consider options to enter your new career part-time to start, while still holding on to the security of your full-time position. Last, plan your budget to determine what you truly need to earn to make ends meet.  Be honest during this phase of the planning and check out “Your Family Budget” for tools to help set-up and stick with a new budget.

Finally, time to polish off that resume!  Monster.com provides a free resume review.  This can be a great place to start if you’re updating for the first time in several years.  Utilize friends and family to practice interviewing skills.

The Muse shares 31 Common Interview Questions, along with tips on how to answer them!  When interviewing, let it be known that you are switching careers because you’re passionate about the field you are entering.  Your enthusiasm and energy, combined with the skills and experience gained in prior careers will make you an attractive candidate!


Zoetropolis Cinema Stillhouse

Did you know that Lancaster City has its own movie theater?  For over 20 years Zoetropolis Cinema Stillhouse has been serving up great independent films and treats to patrons.  They have moved twice since first opening their doors in the 90s and their current home is one you shouldn’t miss!

Zoetropolis – more than just movies!

Zoetropolis is newly re-opened at 112 N. Water Street, operating under a new model – the Cinema Stillhouse. It’s a unique balance of different things including a theater/restaurant/distillery combo. The building space itself is shared with two other local businesses – Columbia Kettle Works and La Cocina Mexicana.  Although they remain independent entities, these three local businesses compliment each other very well!

Zoetropolis offers outstanding alternative film content that they’ve become well known for…art house film, independent, documentary and foreign films. They are beginning to add more live music events to their calendar.  Currently, Zoetropolis is featuring 1-2 nights of live music performance per month, when the whole place transforms into a fantastic concert venue. Other live events that can be found at Zoetropolis include The Lancaster Story Slam and Lanc Out Loud Comedy nights.

What’s new, besides the fabulous location and live music?  They are on the brink of opening their own restaurant and distillery. Their distiller is excited to be sharing his own quality spirits with the initial offerings including vodka, gin and rum. The restaurant will offer a shared plates menu and when the weather is nice, their large garage doors will lift to allow for outdoor courtyard seating.

Zoetropolis is not like just any other movie theater.  Films are carefully selected for content and substance.  Movies are shown that bring value and meaning, artistic relevance, and a social connection – making you think in new and interesting ways.  The experience is enhanced further by the viewing environment. The theater offers comfortable seating to hang out afterwards allowing patrons to discuss and process while still completely in the moment.

For an upcoming list of movies and events, hours and pricing, refer to their website.  To get in touch with someone personally, email is the best means at info@zoetropolis.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.”


Finding the Right Tax Preparer for YOU!

Finding the right person or company to prepare your taxes is an important choice.  You want someone who will do the research to get you the best possible refund for your situation.  Of course, you need someone who will do so ethically and responsibly. And you don’t want to pay more than necessary or wait forever to have those returns completed.  So how do you go about finding the best person for the job?

itp taxes

Many people start with recommendations from friends and family.  Knowing who others trust is a valuable guide to who might work well for you.  Checking with the Better Business Bureau is another good way to verify the history of a potential tax preparer.


Don’t be afraid to ask questions of the tax preparer before committing.  Some important things to know up front include whether the preparer will e-file for you.  Get a quote for preparation fees ahead of time and an estimated time-frame for completion.

After your taxes are completed you can protect yourself in several ways.  Review the completed return before signing. Make sure that the refund is coming back into your bank account by double checking the routing numbers.  Be sure that the tax preparer has included their PTIN (Preparer Tax Identification Number) with their signature before you pay for their service. The IRS is seeing a rise in the number of what they call “Ghost Tax Preparers”.  These scammers can cheat you out of the fee that they charge without being actual certified preparers. So make sure your satisfied and everything looks correct before making that payment.


If you have issues or concerns with your tax return, please report it to the IRS.  Complete IRS Form 14157 to file a complaint or if you suspect illegal practices.  This is the best way to be sure that unethical behaviors are stopped and don’t recur in the future.  


Earned Income Tax Credit

Never heard of the Earned Income Tax Credit (EITC)?  Unfortunately many Americans have not. This has compelled the IRS to declare January 25th “EITC Awareness Day”.  The purpose of January 25th being to educate the public about this important credit.

The EITC was originally created in the 1970’s in an attempt to help alleviate poverty.  It has been an effective tool in doing so, in several ways. The credit provides an incentive to work because it is calculated based off of earnings.  

The EITC percentage increases the more you earn, up to $22,300 of income per year. It then decreases on its way back down to a salary level of $47,162 at which point the EITC is not offered.  The maximum credit allowance is $6,431 and the minimum is $519.

However, it has in more recent years been the subject of attack.  Critics are frustrated because the credit gives money back to Americans who aren’t currently paying into the system.  Many of the qualified recipients of EITC fall below the income level required to file taxes.

With increased EITC awareness, the IRS is finding that some taxpayers may be due credit from previous years.  Fortunately, it is possible to go back in time three years to claim a refund. For tax year 2018, refunds can be claimed as far back as 2015.  At this point, electronic filing is not available for prior year refunds and paper claims must be submitted.

If you are claiming the EITC credit, there are tax forms that must be filled out to do so.  The IRS recommends getting help filing for EITC. Uncertain about forms, whether you are eligible, or need assistance getting caught up from previous years?  Our office is here for you this tax season!


Tax Penalty Waived

There is good news for anyone who fell short on their 2018 federal income tax payments.  The IRS recently announced that it is waiving the tax penalty for taxpayers who have paid at least 85% of their tax bill.  This is in contrast to the normal 90% payment requirement. The change is allowed because of the far reaching impacts of the TCJA which was enacted in December 2017.  

In its first year, many taxpayers were caught unaware of the impact the TCJA would have to their bottom line. Tips to avoid the same pitfall in future years include adjusting your paycheck withholding.  Various guides are available to help assist with W4 witholdings. On our blog “W-4s & You: How Much to Withhold and the IRS website can help you plan for future years.  

Two of the TCJA changes that have had the greatest impact on taxpayers are the elimination of exemptions for dependents and of most itemized deductions.  For taxpayers who have depended greatly on these types of claims in the past, there is a greater risk of having not enough tax withheld from pay. The IRS is finding that other high risk categories include two wage earner families, employees with non-wage sources of income, and anyone with complexities to their tax situation.  For more information from the IRS on this decision and how it may impact you, their website provides good details.  If you would like more information on changes brought about by the TCJA, our blog shares lots of information.  For assistance budgeting and planning for future tax season, ITP Taxes is happy to help!