Tax Reform

On December 20, Congress passed the most significant tax reform bill since 1986 and today, President Trump signed it into law. 

Beginning in 2018 under the new tax law, individuals can only claim an itemized deduction of up to $10,000 for the total of state and local property taxes and state and local income taxes. Consider paying the last installment of 2017 estimated state and local taxes by Dec. 31, 2017, rather than on the 2018 due date. But don’t prepay in 2017 a state income tax bill that will be imposed for 2018. Such prepayments aren’t deductible in 2017. (The new law only forbids state income tax prepayments, so a prepayment of 2018 property tax before year end is apparently OK.)

The medical expense deduction gets a temporary boost under the new tax law. Taxpayers can claim medical expenses as an itemized deduction to the extent the costs exceed a limit. For decades, that limit was 7.5% of adjusted gross income (AGI). Then, in recent years, the limit was raised to 10% of AGI. However, the Tax Cuts and Jobs Act rolls back that limit to 7.5% for both 2017 and 2018, allowing more people to qualify for this tax break, if they continue to itemize deductions. Check with your tax advisor for information in your situation.

If you have any control over the timing of your income, you may consider accelerating income you might otherwise recognize in 2018. For example, if you are planning to exercise options or realize capital gains in 2018 to generate liquidity for your cash flow needs, then go ahead and do that in 2017 instead.  If you’re in a state with an income tax rate greater 6% and you are not in AMT for 2017, the ability to deduct the related state income taxes on accelerated income would outweigh the reduced top bracket in 2018 (39.6% versus 37%).  This strategy applies to single filers with taxable income exceeding $500,000 or married filing jointly taxpayers not in AMT with taxable income exceeding $600,000.

The Act slashes corporate tax rates, reducing the current 35% rate to 21% and repeals the corporate alternative minimum tax.
Other critical business provisions are radically reshaped:

  • Until the end of 2022, property can be fully expensed in the year of acquisition.  This bonus depreciation provision begins to phase out in 2023.
  • Business interest expense is limited to business interest income plus 30% of business taxable income.  Disallowed interest expense can be carried forward indefinitely.  Small businesses would be exempt from the limits.
  • Net operating losses can be carried forward indefinitely (but cannot be carried back).  80% of income can be offset by net operating losses.

To learn more about the new tax reform and how it may affect your personal taxes or business, please contact us and one of our tax professionals will answer any questions or concerns you may have.



Our IRS Problem Resolution Services

Failure to File (Filing Back Taxes)

For many reasons, taxpayers may find themselves behind in filing their tax returns. The first step is to file any back tax returns so that you are up to date with the IRS. Nacca & Capizzi will work on your behalf with the IRS to resolve any previous issues, get your back taxes filed and work to minimize any back tax debt as well as any penalties related to your failure to file.

The IRS does not allow taxpayers to utilize other tax debt relief options such as an Offer in Compromise or Installment Agreement unless all of your back taxes have been filed. Once the back tax returns are filed, Nacca & Capizzi can work with the IRS to organize other payment methods if you are unable to pay the balance due in full.

IRS Tax Liens and Levy

Do not ignore a notice from the IRS as it can have very serious consequences. The IRS can and will place a lien on your property, your home, your car and wages or even go as far as seizing your property in order to collect the back taxes. Contact Nacca & Capizzi immediately so that we may begin to negotiate on your behalf. When you work through our accounting firm, it shows the IRS that you are trying to resolve the issue quickly and giving a good faith effort to get up to date with tax returns and payments.

Wage Garnishment

Wage Garnishment can be one of the ways that the IRS utilizes to collect any taxes and penalties you owe to them. When they contact your employer they will mandate that your employer sends a portion of your wages directly to the IRS to pay down your tax debt. If your wages have been garnished, contact our IRS specialists at Nacca & Capizzi, immediately.  We will reach out the IRS to work out an arrangement with them to settle your debt and have the wage garnishment removed.

IRS Audit Assistance

If you have received a notice or letter that you are being audited by the Internal Revenue Service, don't panic - contact Nacca & Capizzi immediately. As experienced tax specialists, we have the knowledge and expertise to deal with them on your behalf. We are very familiar with their rules and are experts in negotiations to get you the lowest possible debt settlement allowed by law.

Tax Settlement Options

Offer in Compromise

Not everyone can qualify for an Offer in Compromise (OIC), an agreement between you and the IRS, which may help you settle your back tax debt for lower than what you originally owed. At Nacca & Capizzi, we are experienced tax and problem resolution professionals who have great familiarity and tremendous success with negotiating Offers in Compromise with the IRS.  96% of the taxpayers we have recommended using the OIC program have been accepted by the IRS; some for as little as $1!!  Contact us today so we can determine if your situation qualifies for this special program.

Installment Agreement

If you are not able to afford to pay your tax debt immediately, Nacca & Capizzi can help negotiate an Installment Agreement with the Internal Revenue Service. This form of payment plan can be an excellent option for taxpayers who cannot afford a lump sum payment to cover their tax debt.

Currently Not Collectible

When your account is placed into a Currently Not Collectible status, it means that your account is removed from the IRS' active collection status. There are very strict guidelines for people who qualify for this status. Contact us today so we can help you determine if you qualify.

Penalty and Interest

Nacca & Capizzi is experienced at representing taxpayers before the IRS to negotiate lower or even remove penalties or interest payments on back taxes.

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