Howard

Christie signing Executive Order today so that everyone in any location in the state can prepay their Q1 and Q2 property taxes this year: http://www.nj.com/politics/index.ssf/2017/12/you_may_soon_be_able_to_prepay_your_2018_tax_bill.html#incart_river_home

This was in the Wall Street Journal today and answers many of the tax questions that have been recently discussed and questioned here: The Answers to Your Best Tax Questions Wall Street Journal readers are bombarding tax reporters and their own advisers with questions about the overhaul that Congress has passed and President Donald Trump has signed. Most provisions take effect Jan. 1—giving you little time to act. By Laura Saunders Published Dec. 27, 2017 at 5:30 a.m. ET Mortgage-interest deduction Capital gains, dividends and FIFO Pass-through tax cut State and local tax deductions Retiree taxes Alternative minimum tax Charitable donations Medical expenses deduction Investment advisory fees Mortgage-interest deduction I heard that interest will be deductible on mortgages only up to $750,000. Is this true? What about refinancings? The new law allows taxpayers with existing mortgages to continue to deduct interest on a total of $1 million of debt for a first and second home. For new buyers, the $1 million limit is now $750,000 for a first and second home. This means that if Jane already has a $750,000 mortgage on a first home and a mortgage of $200,000 on a second one, she can continue to deduct the interest on both. What if she already has one home with a $750,000 mortgage and wants to buy a second one next year and get a mortgage of $200,000? In this case, she couldn’t deduct the interest on the second loan, according to a spokesman for the National Association of Realtors, or NAR. As to refinancings: The NAR says it believes homeowners can refinance mortgage debt existing on Dec. 14, 2017, up to $1 million and deduct the interest. But the new loan can’t exceed the amount of the mortgage being refinanced. So if Ted has a $1 million mortgage he has paid down to $800,000, then he can refinance up to $800,000 of the debt and continue to deduct interest on it. The law also suspends deductions for interest on home-equity loans through 2025. Capital gains, dividends and FIFO Does the new law change the taxes on capital gains and dividends? What about that “FIFO” change? The new law doesn’t change the rates for this type of investment income, and the tax brackets change little from current levels. The popular zero tax rate on long-term capital gains and many dividends will continue to exist. In 2018, the zero rate on this investment income will apply up to $77,200 of taxable income for married joint filers ($38,600 for singles). The 15% rate then takes effect up to $479,000 for joint filers ($239,500 for singles). The 20% rate applies above that. Many readers also have asked whether Congress repealed the 3.8% surtax on net investment income. It didn’t. This levy kicks in at $250,000 of adjusted gross income for most married couples and $200,000 for most singles. But lawmakers didn’t enact a provision for individual investors known as FIFO, for first-in, first-out. The FIFO change would have forced investors who are selling part of a holding in a taxable account—as opposed to a retirement account—to sell their oldest shares first. Congress’s inaction means taxpayers can continue to minimize taxes by choosing among shares if they are selling part of a holding. For many investors, selling partial positions to lower their tax bills is a year-end ritual. For example, say John owns Acme shares that now sell for $50 each. If he bought Acme shares at $30 and then again at $60, he would have a $10 loss in each share bought for $60 and a $20 gain in each share bought for $30. If John has losses elsewhere in his portfolio, he could sell some of the $30 shares and use the gain on them to offset his losses. But if he has gains elsewhere, he could sell some $60 shares and use the losses to offset the gains. Pass-through tax cut I’m a psychotherapist who is a “sole proprietor” filing a Schedule C. Will I benefit from the tax cut for pass-through businesses? You very well could, says Gil Charney, director of the Tax Institute at H&R Block. The tax break is a deduction of 20% of business income earned by the owners of so-called pass-through businesses. These businesses flow income directly through to owners’ individual tax returns, where it is taxed at the owner’s rate. Pass-throughs include sole proprietorships as well as partnerships, limited liability companies and S corporations. The tax cut “is a novel approach, and the lower rate will help millions of small-business owners,” Mr. Charney says. It will encourage many to expand, he adds. There are limits to the new break. An important one is that the benefit phases out for single filers with taxable income above $157,500 and married joint filers earning more than $315,000 who are “service professionals”—such as doctors, lawyers, accountants, consultants and others. The income limit also would be an issue if a lower-earning spouse with a pass-through firm is married to someone earning much more. This would be the case, for example, if a psychotherapist earning $80,000 is married to a corporate executive earning $400,000. The tax cut for pass-through business is so new that it will take time to understand, but many sole proprietors stand to benefit from it. State and local tax deductions The new law limits state and local tax deductions (SALT) to $10,000 per return. I’m married, so if my spouse and I file separately, will we get two $10,000 deductions instead of just one? Sorry, no. The SALT deduction for married couples filing separately is $5,000 each, for a total of $10,000 per couple—just as if you filed jointly. Although married couples can file separate returns, the tax law doesn’t give them the same benefits as two separate filers. To get two $10,000 deductions, you’d have to get divorced. There are steps to take ahead of the landmark change for 2018, which indeed will limit taxpayers to one $10,000 SALT deduction per return. The deduction can be a mix of property taxes and income or sales taxes. The new law specifically bars deductions for payments earmarked for 2018 state income taxes, but tax specialists say it is still a good idea to pay balances due on 2017 income taxes before year-end. The law doesn’t bar prepayments of property taxes. Some locales are making it easier to pay property-tax bills due in 2018 in order to get a 2017 deduction. In general, says Crowe Horwath accountant David Lifson, the 2018 amount has to be billed in 2017 to be eligible for a 2017 deduction—but many locales do bill this way. Another caveat is that taxpayers who owe alternative minimum tax, or AMT, for 2017 will lose some or all of the value of SALT deductions. For them, accelerating payments could provide a reduced deduction or none at all. Because the AMT is complex, it is hard to know the best moves without using a computer program. Retiree taxes I’m retired. How are the changes going to affect me? One key change will be positive for many retirees. The positive change is that the standard deduction is nearly doubling, to $12,000 for individuals and $24,000 for married joint filers. This is the amount taxpayers can deduct if they don’t list write-offs for state taxes, charitable donations and the like on Schedule A. Many retirees who have paid off their mortgages take the standard deduction. Congress also decided to keep the “additional standard deduction” for people age 65 and over in the new law. It will be $1,600 for singles and $1,300 for each spouse in a married couple in 2018, which is what it was going to be for 2018 in the old law. The personal exemption, which would be $4,150 in 2018, also is being repealed. The bottom line: Say John and Margaret are a married couple, ages 67 and 65, with no children at home. Under the prior law for 2018, they would get a standard deduction of $13,000, additional deductions of $2,600, and personal exemptions totaling $8,300. Total: $23,900. Under the new law, John and Margaret will get a standard deduction of $24,000 plus an additional standard deduction of $2,600, for a total of $26,600—or $2,700 more. Provisions affecting retirees that aren’t changing include taxes on Social Security benefits and retirement-plan distributions. There is also no change to individual retirement account, or IRA, charitable transfers, which allow retirees 70 ½ and older to donate IRA assets up to $100,000 directly to charities and have it count toward their required annual payout. For IRA owners who want to give to charity, this is often a tax-efficient move. The taxpayer can take the standard deduction and still get a charitable tax break. While there’s no deduction for this type of gift, neither does the IRA withdrawal raise the donor’s income. That can help reduce the 3.8% surtax on net investment income, Medicare premiums and even taxes on Social Security for some. Alternative minimum tax I read that Congress decided to keep the alternative minimum tax, or AMT, for individuals. Who will it affect? Although Republican lawmakers vowed to end the AMT, in the end they retained it. It’s an unpredictable and complex parallel tax system that reduces or ends tax breaks allowed by the regular tax system. Many details of the new AMT are still unknown. The good news for most current AMT payers is that it will affect far fewer people, says economist Joe Rosenberg of the Tax Policy Center, a nonprofit group in Washington. Mr. Rosenberg estimates the new AMT will affect the filers of about 200,000 returns, while the current one affects about five million. Those paying the new AMT are also likely to earn much more than those who pay it currently, who tend to earn $200,000 to $600,000. Several triggers of the current AMT—such as state and local tax deductions, personal exemptions and miscellaneous deductions—are being reduced or repealed. Mr. Rosenberg says the tax breaks that trigger the new AMT are likely to be more unusual items, such as incentive stock options, interest from certain municipal bonds and net operating losses. Charitable donations I gave $5,000 to charity last year, which I deducted on my return. If I give that much in 2018, will I get a tax benefit for deducting it? Maybe not. Next year, the standard deduction nearly doubles, to $12,000 for single filers and $24,000 for married couples filing jointly. This is the amount taxpayers get if they don’t list write-offs for mortgage interest, charitable donations and the like on Schedule A. As a result, next year a filer’s total itemized deductions—up to $10,000 of state and local taxes, plus charitable donations, mortgage interest, eligible medical expenses and other items—will need to exceed the new standard deduction amounts in order to get a benefit from listing donations on Schedule A. Here are two examples. Say Susan and her husband, Bill, give $5,000 to charity in 2018, but their mortgage is paid off and they don’t have other itemized deductions except $10,000 of state taxes. Their total itemized deductions are $15,000, which is far below the new $24,000 standard deduction. So it doesn’t make sense to break them out. Linda, a single taxpayer, is in the same situation—$5,000 to charity and $10,000 of state and local taxes, but no other write-offs. She could get a tax benefit from her donations next year, because her $15,000 total exceeds her $12,000 standard deduction. For givers who want a benefit from Uncle Sam, there are ways to cope with this new limit. One is to “bunch” deductions every few years in order to surmount the higher hurdle for a charitable deduction. Givers also should consider so-called donor-advised funds. These popular accounts enable donors to bunch smaller gifts into one large amount and take a deduction in the year of the gift. The donor can then designate charitable recipients later, and meanwhile the assets can be invested and grow tax-free. Donors who have IRAs and are 70½ or older have another good strategy. They can contribute up to $100,000 of IRA assets directly to one or more charities and have it count toward their annual required distributions from the IRA. For more on this option, see “Retiree taxes” in this article. Medical expenses deduction Is the medical expense deduction changing? We spend $13,000 a month on care for my husband, who is in a nursing home, and the tax deduction helps us to afford it. In the end, Congress decided not to repeal the deduction for medical expenses proposed by Republicans in the House of Representatives. As a public outcry made clear, many people are in this position. This deduction has a high hurdle, so many taxpayers who can take it have very large unreimbursed medical expenses, such as for nursing homes or custodial care at home. Insurance premiums paid with after-tax dollars help others clear the hurdle. The new law has a slight expansion, says H&R Block’s Mr. Charney. It allows taxpayers take a deduction for 2017 and 2018 if medical expenses exceed 7.5% of income rather than 10% of income. Investment advisory fees I’ve heard I won’t be able to deduct investment advisory fees next year. Can I prepay them? Probably not, says Tim Steffen, a tax specialist with Robert W. Baird & Co. The new law repeals Miscellaneous Deductions on Schedule A. This is a grab bag of write-offs for everything from uniforms to professional dues to unreimbursed employee expenses for entertainment to investment advisory fees. This deduction has a high hurdle: Taxpayers can’t use it until eligible expenses exceed 2% of adjusted gross income. And if they are subject to the alternative minimum tax, this deduction isn’t allowed. Deductible investment advisory fees typically don’t include mutual-fund expenses or commissions. Instead, these are the quarterly fees that advisers charge based on the total value of an account. They also could include annual account fees, such as for IRAs. Fees for 2017 should be paid before year-end if possible, Mr. Steffen says. But they probably can’t be prepaid for next year because they can’t be determined ahead of time. Investors also should consider paying future charges on traditional IRAs using assets inside the account. There won’t be a tax deduction, “but at least you are paying with pretax dollars,” Mr. Steffen says. But don’t pay fees for taxable accounts with IRA assets, as that could be considered a taxable withdrawal from the IRA.

Yes same rules. ETFs are basically the same as a stock. They are an unmanaged basket of "things" and trade just like a stock.

I wonder if any left wing environmentalists are “investing” it Bitcoins, which consume around $1,500 in electricity each to “mine”?

Very good analysis, however you should not be using the word adjustments as they are very different than deductions. Adjustments are specific above the line reductions in your income to come with what is known as adjust s gross income. Deductions are below the line r suction’s to come up with taxable income. Also even for people that take a standard deduction there are also tax credits which are different than deductions. While deductions only give you a reduction in taxable income credits actually reduce your tax dollar for dollar. That assumes you actually owe tax, but there are som credits such as the child tax credit which are partially refundable. Bottom line even though the changes make it simpler for many with a large standard deduction the tax code is still very complex. Oh and the new 24k standard deduction is not really double the old 12k one as they have taken away the $4050 personal exemption. So a married couple with no kids was getting $20,100 with those two combined and now gets $24,000 effectively. Even if they did not take the standard deduction they got to take the $4050 personal exemption. So many actually come out worse BUT it com a out in the wash with the bracket changes that are all about 2% points lower. Bottom line is even in the socialist people’s republic of New Jermany most will Pay lower Federal taxes, just not as much lower than if they lived in a fiscally responsible state.

All true except for the last part. Any change would require 60 votes in the Senate and the Dems are not about to bail out the Republicans on any changes. What it is it is at this point.

Don't even get me going or the F'ing AMT crap. At least the exemption for 2018 will get most off of that crap finally.

Not exactly. For 2018, if you itemize, the total you will be able to deduct for all state and local income taxes AND property taxes and sales taxes will be $10,000. So you if you itemize anything over $10,000 is worthless for next year. Also you may not be itemizing in the future due to the standard deduction goingnup to $24,000 for couples.

This just came in my email this morning from the local electronic "newspaper" about what our town says about this: https://www.tapinto.net/towns/randolph/articles/pre-payment-of-2018-randolph-property-taxes-being Pre-Payment of 2018 Randolph Property Taxes being Accepted By RANDOLPH TOWNSHIP December 23, 2017 at 7:12 PM RANDOLPH, NJ- In light of the sweeping tax overhaul approved by the U.S. Congress earlier this week, the township has received multiple inquiries as to whether property owners would be permitted to pre-pay their 2018 estimated taxes on or before the end of 2017. The township is able to accept a pre-payment of the first and second quarters of a property owner’s 2018 estimated property taxes. All payments must physically be in the tax office on or before close of business on Friday, December 29, 2017. If you have a mortgage company that escrows and pays on your behalf, you must consult with them to prevent the duplication of payment(s). Please note that the township cannot provide tax advice and we encourage property owners to consult with their licensed tax professionals as whether a pre-payment of taxes is advisable or not.

My guess is half that amount but a quick Google search would give the answer. For those that have a mortal age company Pay things you could just make the extra payment yourself and then provide them proof. You could also give them the money and instruct them to make the payment but there might not be enough time to do that at this point.

Interesting, I don’t think it is up to the town. Those are actually issues by the state, I believe, and also have the county tax built into them.

So as we all know, or should know, your SALT deductions will be capped starting next year at $10,000 max. Many may not even be able to take any deduction if they take the new $24,000 standard deduction for a married couple. BUT if you act before the end of the year you could save big. The Feds were smart enough to put in the bill that you could not prepay your state income taxes to get a deduction this year for next years taxes. They were not quite that smart about property taxes. If you have already received a bill for property taxes you can pay them and take a deduction this year. Since NJ has sends out the tax bill mid year you already have the bill and coupons for your first quarter and second quarter 2018 property taxes. If you pre-pay them before year end you can deduct those two 2018 property tax bills this year, even though you would not be able to do so next year due to being over the $10,000 limit. So let's say those two bills come to $5,000 and you are in the 28% bracket, doing this will put $1,400 in your pocket. This may not apply if you are subject to AMT. **** Please note I am not an accountant, have not played one on TV, and have not recently stayed in a Holiday Inn Express - so take free advice for what it might be worth

They have an add-on device called the connect but I don’t know exactly what it does. You could go to amazon and read about it. Not sure why you would need it though. I can just say call “joe smith” and if that name is in my contacts it will cal that person over Wi-Fi and their phone will ring and it is like talking on any speaker phone with no phone service needed. If they are not in your contact list you just speak the actual phone number and it will call.

Echo only records what you say immediately following the activation word, it does not record any other time.

Listening yes, recording no.

The Echo system only listens for the activation word, typically Alexa, and then records what you say then and only then. The NSA does not get this information either, as I used to routinely say "commence the plan to kill Obama today" and I never got any visits from anyone

You can't possibly live without one They are fun toys, but they are actually quite useful. We have an echo, two dots, and a dash. My wife uses one as her alarm clock all the time. I tell the same one to play Bloomberg Radio on TuneIn while I read the market reports on my iPhone before I get up. At night we use it as a white noise machine playing rain or ocean wave sounds. You can link them all together so you have the same thing playing all over the house. They also work as an intercom. They also now work as a voice activated telephone. You can call landlines, cellphone, any phone number on them for free. We play Jeopardy on them. We can use them as voice remotes for our PS Vue account. We don't have any of the smart home stuff, but if you do you can control lights and all sorts of things with your voice. I love them.

Most people have no clue how bad the AMT is. While it was designed in the 1960’s to punish the richest 100 people it was never indexed for inflation. It currently attacks people making around $150K to about $500k the worst. It actually has almost no impact on those making seven figures. At least it is now gone for most people with the new law.

We all knew Murphy was a total POS but this is just more evidence: https://www.cnbc.com/2017/12/20/new-jersey-may-fight-gop-tax-plan-in-court-says-governor-elect.html

The left sure won't like this analysis: https://www.cato.org/blog/final-tax-bill-biggest-cuts-middle?utm_content=buffer06fb3&utm_medium=social&utm_source=facebook.com&utm_campaign=buffer

Everyone’s situation is different and it does not take into consideration every situation. It is fairly accurate for most people. What do you expect from something with so few inputs? Should be order of magnitude correct.

That must be some house in Morris Plains as they have probably the lowest taxes in Morris County due to all the commercial rateables. I’m in Randolph and our taxes are typical double what they are there for an equivalent house. But remember that the deduction is only worth a fraction of the actual amount, that fraction being your marginal rate. But those rates are dropping about 2% for your entire income.

Yup. And many will find they no longer itemize as the standard deduction goes up from about $12k a couple to $24K, although the $8,100 personal exemptions go away too.

Check the link below, it will give you a very good how it will impact your taxes based on your specifics. I think most people, even many in the socialist people's republic of New Jermany will find their taxes go down. Many that are bitching about the SALT reduction or elimination don't realize they really were not getting them anyway. If you had two incomes and high property and state taxes you were most likely paying the AMT which takes back the SALT deductions. Also the AMT is being eliminated for incomes either below $500K or $1.0mm - not sure which one yet. That is huge for many. Further, the elimination of SALT should put a lot of pressure on the state and local governments here in NJ to either reduce our taxes or cut expenses or both. If they don't they will be in a world of hurt as those that can leave will do so. http://taxplancalculator.com/