Tax Cuts and Jobs Act Summary

On December 22, the President signed into law the Tax Cuts and Jobs Act of 2017 (TCJA). TCJA is the largest tax overhaul since the 1986 Tax Reform Act and it will affect almost every individual and business in the United States. Generally, the new law goes into effect in 2018, with many of the provisions relating to individuals expiring at the end of 2025.

Overview of TCJA Changes Affecting Individuals

The following is a brief overview of TCJA’s key changes (and non-changes) affecting individuals.

Tax Rates and Brackets: TCJA provides seven tax brackets, with most rates being two to three points lower than the ones under present law (the top rate goes from 39.6 percent to 37 percent). The top rate kicks in at $600,000 of taxable income for joint filers, $300,000 for married taxpayers filing separately, and $400,000 for all other individual taxpayers.

Observation: While applicable rates at any given level of income generally go down by two to three points, some go up. For example, the rate for single individuals with taxable income between $200,000 and $400,000 goes from 33 percent to 35 percent.

Capital Gain Rates and Net Investment Income Tax. Tax rates on capital gains and the 3.8 percent net investment income tax (NIIT) are unchanged by TCJA.

Personal Exemptions and Standard Deduction. TCJA repeals the personal exemption deductions, but nearly doubles the standard deduction amounts to $24,000 for joint filers and surviving spouses, $18,000 for heads of household, and $12,000 for single individuals and married filing separately (additional amounts for the elderly and blind are retained).

Observation: The fact that the standard deduction has nearly doubled may create the misleading impression that you’ll reap a large tax benefit from the change. But, because the increase in the standard deduction was coupled with the repeal of the deduction for personal exemption ($4,150, per exemption in 2018), the actual benefit is fairly modest. For example, the overall amount of income that is exempt from tax will increase by $2,700 for joint filers – a nice increase, but nowhere near double the $13,000 standard deduction under prior law.

Because the standard deduction is generally claimed only when its amount exceeds available itemized deductions, the increases will not benefit you if you itemize (the repeal of personal exemptions, by contrast, will affect you whether you itemize or not).

Exemption for Dependents and Child Tax Credit. As part of the repeal of personal exemption deductions, TCJA repealed exemptions for dependents. To compensate, TCJA increases the child tax credit to $2,000 ($1,400 is refundable), up from $1,000 (fully refundable) under present law. The modified adjusted gross income threshold where the credit phases out is $400,000 for joint filers and $200,000 for all others (up from $230,000 and $115,000, respectively). The maximum age for a child eligible for the credit remains 16 (at the end of the tax year).

TCJA also provides a $500 nonrefundable tax credit for dependent children over age 16 and all other dependents. Most families with non-child dependents will lose some ground here, as the $500 credit will generally be less valuable than the $4,150 exemption deduction it replaces.

Other Tax Breaks for Families Unchanged. The child and dependent care expenses credit, the adoption credit, and the exclusions for dependent care assistance and adoption assistance under employer plans are all unchanged by TCJA.

Passthrough Tax Break. TCJA creates a new 20 percent deduction for qualified business income from sole proprietorships, S corporations, partnerships, and LLCs taxed as partnerships. The deduction, which is available to both itemizers and nonitemizers, is claimed by individuals on their personal tax returns as a reduction to taxable income. The new tax break is subject to some complicated restrictions and limitations, but the rules that apply to individuals with taxable income at or below $157,500 ($315,000 for joint filers) are simpler and more permissive than the ones that apply above those thresholds.

Example: In 2018, Joe receives a salary of $100,000 from his job at XYZ Corporation and $50,000 of qualified business income from a side business that he runs as a sole proprietorship. Joe has no other items of income or loss. Joe’s deduction for qualified business income in 2018 is $10,000 (20 percent of $50,000).

Observation: The effective marginal tax rate on qualified business income for individuals in the top 37-percent tax bracket who are able to fully apply the new deduction will be 29.6 percent – fully 10 points lower than the top rate under current law.

Deduction for State and Local Taxes (SALT). TCJA imposes a $10,000 limit on the deduction for state and local taxes, which can be used for both property taxes and income taxes (or sales taxes in lieu of income taxes) and repeals the deduction for foreign property taxes. There is no limit on the amount of the SALT deduction under present law.

Mortgage Interest Deduction. TJCA reduces to $750,000 (from $1 million) the limit on the loan amount for which a mortgage interest deduction can be claimed by individuals, with existing loans grandfathered. TCJA also repeals the deduction for interest on home equity loans.

Deduction for Medical Expenses. An early version of the tax overhaul passed by the House would have repealed the deduction for unreimbursed medical expenses. TCJA retains that deduction and enhances it for 2017 and 2018 by lowering the adjusted gross income (AGI) floor for claiming the deduction from 10 percent to 7.5 percent for all taxpayers.

Deduction for Casualty and Theft Losses. TCJA repeals the deduction for casualty and theft losses, except for losses incurred in presidentially declared disaster areas.

Observation: The new law does, however, provide enhanced relief for victims in federally declared disaster areas in 2016 and 2017.

Deduction for Charitable Contributions. TCJA retains the charitable contribution deduction and increases the maximum contribution percentage limit from 50 percent of a taxpayer’s contribution base to 60 percent for cash contributions to public charities.

Deduction for Certain Miscellaneous Expenses. TCJA repeals the deduction for any miscellaneous itemized deductions subject to 2-percent of AGI floor.

Repeal of Alimony Deduction. TCJA repeals the deduction for alimony paid and also the corresponding inclusion in income by the recipient, effective for tax years beginning in 2019. Alimony paid under separation agreements entered into prior to 2019 will generally be grandfathered under the old rules.

Education-Related Tax Breaks Preserved. TCJA retains deductions for student loan interest and educator expenses, and also exclusions for graduate student tuition waivers and employer educational assistance programs.

Alternative Minimum Tax. TCJA increases alternative minimum tax (AMT) exemption amounts by 27 percent, and sharply increases the income level where the exemption is phased out. Combined with the effects of other TCJA changes, many individuals who are currently subject AMT in 2017, will not be in 2018 and beyond.

Expanded Uses for 529 Plan Distributions. TCJA allows up to $10,000 in aggregate 529 distributions per year to be used for elementary and secondary school tuition. Under present law, 529 distributions can only be used for higher education expenses.

Repeal of Individual Healthcare Mandate. TCJA repeals the tax penalty on individuals who fail to carry health insurance enacted as part of the Affordable Care Act (ACA).

Estate and Gift Tax Exclusion. TCJA permanently doubles the basic exclusion amount for estate and gift tax purposes from $5.6 to $11.2 million. A provision fully repealing the estate tax beginning in 2025 was passed by the House, but didn’t make it into TCJA, so the estate tax will remain in effect with the higher exclusion amount.

Now Serving Clients in Forest Hills and the Rest of Queens!

I’m proud to announce that, starting January 1st, I will be expanding to Forest Hills, Queens to better serve the area. I hope this move will help give my clients that live in Queens, and NYC, greater access to both myself and my services.

For now, I’ll only be taking appointments in Forest Hills on Fridays and weekends. In the future, I may expand those hours and, as always, I will accommodate unique situations.

My main office in Huntington will still remain open and my phone number and email address will stay the same. Expect the same great service as before but with a wider reach.

We’ve been nominated for the best of LI!


I’m extremely proud to announce that I’ve been nominated for both the best Accountant and Accounting Firm in the ‘Bethpage Best of LI’ awards. The ‘Best of LI’ awards celebrate the Long Island’s best activities, businesses, and schools – as nominated and voted for by locals!

I pride myself on the positive feedback I receive from my clients and would love for you to continue your great support by voting for me.

If you would like to vote for me (and I hope that you do!), you can visit Bethpage Best of LI to vote for me in the ‘Accountant’ and ‘Accounting Firm’ categories.

Voting will close on Friday 15th December 2017, so get clicking now!

A huge thank you in advance to everyone who is able to vote– I couldn’t have done it without you!

What is an IRS CP2000 notice and what do I do?

IRS CP2000 notices are one of the most common notices. You typically get a CP2000 notice when there’s a discrepancy with what you reported on your tax return and what was officially reported to the IRS by others. Usually, these notices results in an increase in the tax you owed, but sometimes there may be no change or the IRS may owe you money.

CP2000 notice IS NOT A BILL. It is a proposal. You have three options when answering a CP2000 notice, 1. agree and pay the proposed amount in full, 2. disagree and provide proof, 3. hire an accountant to figure it out for you.

If you agree with the notice, follow the instructions included on the notice and response form. If required, include a check for the amount you owe with your social security number written on the memo line. If you can’t pay the entire amount, you may be eligible for an installment agreement which can be made over the phone or online.

If you disagree with the notice, follow the instructions included on the notice and response form. Instead of sending a check, you will need to provide a statement explaining why you disagree and proof that you’re right with your response form. The IRS will then review your statement and send you another notice. It may be a few months before you receive your second notice.

If you decide to get help from an accountant, bring the notice, your tax return from the year in question, and all your supporting documents with you to your meeting. Your accountant may have you sign either the authorization on the response form or Form 2848 ( Power of Attorney and Declaration of Representative). They will do the research, write a response, and send everything to the IRS on your behalf.

Have a question about your notice? Let me know!
(631) 624-0515

3 Tips To Reduce Bookkeeping Stress and Costs

Some small business owners are so focused on running their business that the small administrative tasks get left behind. But, the administrative tasks, like bookkeeping, are just as important and letting them build up can create unneeded stress. Try these 3 tips to make bookkeeping a little less stressful.


Whether you’re doing it yourself or paying a bookkeeper, staying organized can save you a lot of time, stress, and money. It may sound silly but you can only do your bookkeeping with the information you have and the more information you have the better. If you pay a bill, make a note of the date and payment method. If you send an invoice, make a note of the date and payment terms.


Paying your business expenses from your personal account or vice versa makes your bookkeeping much harder and more time consuming. You should always have separate bank accounts and credit cards for your business and your personal expenses.


Receipts, especially the one you’re looking for, frequently go missing. Whenever you get a receipt, take a picture of it and upload it using one of many cloud storage solutions like Dropbox or Expensify. That way you’ll always have a copy of your receipts.

Top 4 Small Business Bookkeeping Mistakes

As a small business owner, your business is your baby and it can be difficult to delegate tasks. But, everyone makes mistakes from time to time, especially when it comes to bookkeeping. Keeping these 4 common mistakes in mind can save you from lots of unnecessary stress and messy financials.


Small charges add up fast. $5 here or there can quickly become hundreds by the end of the year. Skipping these small expenses can result in paying more taxes comes April.


Mixing personal and business expenses gets messy fast. Even worse, it can be difficult to account for when you sit down to do your bookkeeping. Be vigilant when making purchases. Personal expenses go on personal cards and business expenses go on business cards.


Cloud programs like Xero and Quickbooks Online let you get your bookkeeping done from anywhere in the world. But, it’s important to periodically export your data and keep a non-cloud copy. Otherwise, a compromised account or cloud issue will ruin all your hard work.


Bookkeeping isn’t as easy as it sounds and procrastinating can be pretty appealing. But, leaving your bookkeeping till later can put you in a bad position and leave you without a proper understanding of your business’s finances. If you can’t find the time to do your bookkeeping, consider outsourcing it.

Bookkeeping isn’t as difficult as climbing Mount Everest. But, little mistakes can make fixing your records seem like just as much of a challenge. So, keep these mistakes in mind and if you ever want to make the switch to an outsourced bookkeeper, please reach out.

Phone: (631) 624-0515

6 Financial Tips for Business Owners

Entrepreneurs are experts at what they do. They know the ins and outs of their products and services. But, oftentimes, they aren’t experts at running a business. Whether it’s bookkeeping or growing your business, everyone needs a little help from time to time.


#1: Bookkeeping is Important

Bookkeeping is more than tracking revenue and expenses for taxes. It keeps track of your business and provides valuable insight. Who hasn’t paid you in a month? What supplies are costing you too much? How much are you really making?

#2: Don’t Procrastinate

No one wants to do their own bookkeeping. It’s tedious and time consuming. That’s people hire me to do it for them. But, if you’re going to do your own bookkeeping, don’t leave it till the end of the month. You’ll waste an entire day working on it when you could’ve spread it out.

#3: Make a Budget

Budgeting isn’t only for mega-corps and government agencies. It can help your business save money. Budgeting accounts for every dollar before you spend it and helps you make better purchases preventing wasted dollars.

Black and White Picture of Cup, Hand, Mouse, and Keyboard


#4: Go Lean

Lean is a business buzzword for good reason. The goal of lean is to eliminate waste and inefficiencies within your business. The original seven wastes stem from: transport, inventory, motion of employees/equipment, waiting, overproduction, over processing, and product/service defects. Reducing waste in these seven categories can increase your bottom line.

#5: Plan Ahead

Plan for your weaknesses. What is the worst case scenario? How much money do you need to get through a slow busy season? Addressing these weaknesses can minimize the risks of a bad situation.

#6: Build On What You Do Well

80% of your business’s profit comes from 20% of your products or clients. Pinpoint your moneymakers and focus on them. Putting time and extra effort into proven moneymakers will build your business faster than forcing flops to sell.

As a business owner, making wise financial decisions for your company is an ongoing process. But, you don’t have to do it alone.

New Business? Keep First-Year Deduction Rules In Mind

When opening a business, you may have to spend money on equipment, vehicles, legal fees, and leasehold improvements before you can start making money. All of these expenses can be deducted, but they have receive a special tax treatment because they were incurred before your business was open.

Equipment and furnishings:

Equipment can’t be deducted until it’s put in service. So, equipment can’t be deducted or depreciated until your business is open.

On the bright side, equipment placed in service before opening your business, but during the same year you opened is still eligible for Section 179 depreciation and bonus depreciation. Section 179 can be used to immediately expense the total value of your equipment up to the lesser of your business income or $500,000. Bonus depreciation can be elected in tandem with Section 179, but the equipment has to be brand new.

If you’d prefer to draw out your depreciation over the life of your asset, you don’t have to claim Section 179 depreciation.


Cars and trucks are treated like equipment and are depreciated over 5 years. But, they come with their own ‘listed property’ or ‘luxury auto’ special rules.

In 2016, cars that weighed under 6,000 pounds are limited to $3,160 of depreciation ($3,560 for trucks). If you can electing bonus depreciation, you can add an extra $8,000 to those figures.

Start-Up Costs:

New business owners can deduct up to $5,000 of start-up costs in the first year of business. Unfortunately, that amount if limited by any start-up costs in excess of $50,000. Any excess start-up costs have to be amortized and claimed over 15 years.

If you would prefer not to deduct and amortize your start-up costs, you can capitalize them and add them to the basis of your business. Unlike basis in other assets, basis in your business only comes into play when selling or ending your business which means your start-up expenses will have to stew a while before you can recover them.

Start-up costs include:

  • Surveys/analyses of potential markets, labor supply, products, transportation, facilities, etc.
  • Advertisements related to opening the business
  • Wages and salaries paid to employees, and their instructors, while they are being trained
  • Fees and salaries paid to consultants or others executives
  • Travel and related costs to secure prospective distributors, suppliers, or customers

Organizational costs:

New partnerships or corporations can deduct up to $5,000 of organizational expenses in the first year, in addition to any claimed start-up costs. The $5,000 is also limited by any organizational costs in excess of $50,000. Similarly, organizational costs must be deducted & amortized or capitalized & added to basis.

Organizational costs include: legal fees and incorporation fees.

The first year of business is often the hardest and the special business expensing rules make it even harder. But, keep accurate records of everything and we’ll sort it out during tax season. If you have any business questions, don’t hesitate to call.

6 Ways to Grow Small Business Revenue

Owning your own business is the American dream. Sometimes, when you take the leap, everything looks great in the beginning. You’re your own boss, you’re making money, and people really appreciate the work you’re doing. Then, after a few months or years, business starts to stagnate and, no matter what you try, revenue won’t go up. Try one of these 6 tips to increase your small business’s revenue.

#1: Avoid Lower Margins

Which clients, products, or services make the most money and have the most potential for growth? Which clients products, or services make the least money and have the least potential for growth? Every business owner knows exactly which category their clients, products, or services belong in. Dropping low margin and high headache clients, products, and services is a scary prospect because it’ll initially lower your revenue. But, it’ll lower your blood pressure and free up time for you to focus on growing your business.

#2: Embrace Technology

Chances are, if you have a problem, technology has a solution. Whether it’s organizing business cards or posting to social media, there’s technology for everything. Embracing technology and automating processes can free up precious time.

#3: Experiment With Pricing

Raising prices is the most obvious and simplest way to increase revenue. It’s also the hardest because there’s a very real risk of losing clients. But, if you provide high quality products or services many of the clients driven away by high prices are the bargain-oriented customers. Before raising prices, test the waters by discussing it with your clientele.

#4: Bundle Products or Services

Mega corporations like Procter & Gamble and General Electric have their hands in every industry. Small businesses tend to specialize in a single industry or niche. That makes many of their products or services complimentary to one another. When bundling complimentary products or services consider slightly discounting the prices to incentivize clients to buy the bundle.

#5: Maintenance Contracts

Speaking of bundling, we can’t forget the quintessential add-on, the maintenance contract or warranty. Maintenance contracts can generate a steady revenue stream for months or years to come. When developing maintenance contracts, clearly list what is and isn’t included.

#6: Expansion

You can only expand so much in one town or region. Sometimes, you have to consider expanding to another geographic market. On Long Island, that can be as simple as running ads in the next town over. Take advantage of Long Island’s density and widen the geographic region your business serves.

For some small business, growing revenue seems impossible. Saturated markets and slow economies can dampen the most optimistic outlook. But, if your revenue is stagnating, making one of these six changes.

2016 Tax Organizer

It’s a new year and a new tax season is approaching.

Please use these complimentary tax organizers to better manage and organize your tax information. These tax organizers are updated annually and this one was specifically assembled for the 2016 tax year.

There are three types of individual tax organizers. The basic tax organizer is suitable for most clients. The itemized tax organizer is for clients that itemize their deductions. (Hint: if you own a home, you probably itemize.) The full tax organizer includes everything from itemized deductions to rental properties and self-employed income.

After completing the organizer, please forward it to me or bring it to our meeting, so we can get started on your return.

2016 Basic Organizer – This organizer is suitable for clients that are not itemizing their deductions and DO NOT have rental property or self-employment expenses.

2016 Basic Organizer plus Itemized Deductions – This organizer is suitable for clients that are itemizing their deductions and DO NOT have rental property or self-employment expenses.

2016 Full Organizer – This organizer includes the information included in the basic organizer, plus entries for itemized deductions, rental properties and self-employment expenses.

2016 Business Organizer – Use this organizer for partnerships and incorporated business entities.

2015 Prior Year Individual Organizer – If you are filing your 2015 return late, please use this organizer.