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32 THE QUEENS COURIER • SEPTEMBER 20, 2018 FOR BREAKING NEWS VISIT WWW.QNS.COM TAX TIPS Take These Steps Now to Avoid a Tax Surprise In 2019 BY JOHN SAVIGNANO, CPA If you want to head off a tax bill from Uncle Sam next spring, right now is the best time to prepare. Mid-year tax planning is especially Attorney At Law 25-59 Steinway Street Astoria, NY 11103 718-278-3900 WINNER BEST ATTORNEY AND BEST PERSONAL INJURY ATTORNEY Call Now & End Your Tax Nightmare! �� Co-Author of the best selling book “Breaking the Tax Code” �� Salvatore P. Candela, EA, ATA, ABA Enrolled Agent - Tax Advisor �� important in 2018, experts say, as accountants and their clients grapple with a volley of changes from the Tax Cuts and Jobs Act. Updates under the new law include sharp limits to itemized deductions and an overhaul of the tax withholding that applies to your wages. Even your income tax return — Form 1040 — is getting a makeover: It will be postcard sized, with six worksheets filers will need to wade through in order to claim above-theline deductions and credits. Be prepared for your return to look a lot different than it did last year. It’s not just the forms themselves, but in terms of what’s deductible and how your tax is calculated. These are the key planning areas you should review with your accountant this summer. Your Withholding Under the new law, the IRS overhauled the tax withholding tables, which employers use — along with Form W-4— to determine how much income tax ought to be withheld from your paycheck based on the number of allowances you claim and how much you earn. If you haven’t had a chance to review your withholding since the new tables came out in February, be sure to do it now. If you withhold too much, you get a refund next April. But if you’re short, you’ll owe the IRS. In previous years, it may have made sense for wage earners to withhold less under certain circumstances: For instance, if they itemized deductions. That may no longer be the case, especially now that the standard deduction has roughly doubled to $12,000 for singles and $24,000 for married-filing-jointly. The new tax code increased the standard deduction but curbed many itemized deductions. Those changes include a $10,000 cap on the amount of state and local taxes you can claim, and the outright elimination of miscellaneous itemized deductions, like unreimbursed employee expenses and investment fees. For instance, now might be the time to fight back on high property taxes. Further, since fewer people will be itemizing, look for tax efficient ways to pay for things. One way would be to use your health savings account to pay for long-term care insurance premiums if your balance is large enough to handle the expense. Here’s another idea: Revisit your investment fees now that you can’t deduct them. Prior to the Tax Cuts and Jobs Act, you were allowed to deduct investment and custodial fees, trust administration fees and other expenses for managing investments that produce taxable income. Under the old law, you could claim this and other miscellaneous itemized deductions to the extent they exceeded 2 percent of your adjusted gross income. Though you couldn’t take a deduction for traditional IRA fees that you paid directly from the account, under the old law you were able to use other assets to pay those expenses and then take the deduction. Now, you should think twice: If your IRA is growing rapidly and you have a long time horizon, consider using outside money to pay the fees. This way, more of your IRA cash continues growing on a tax-deferred basis. If your time horizon is shorter and you’re in conservative investments, it may make sense to deduct the fee directly from the IRA instead. Charitable Giving If you’re charitably inclined but just short of surpassing the standard deduction, consider making two years’ worth of donations in 2018 to get over the hurdle so that you can itemize. One suggestion is to do zero or close to zero giving in one year and take the standard deduction The following year, load all of your charitable deductions for two years into one. If you’re over 70½ and taking required minimum distributions from a traditional IRA, consider transferring that money directly to a qualifying charity. This move, known as the qualified charitable distribution, allows you to meet your RMDs and your charitable goals at the same time — and you won’t incur income taxes on the distribution. If you don’t get a tax deduction for the gift, you may as well do the qualified charitable distribution and not have to report it as income. John Savignano is a partner with Savignano Accountants & Advisors located at 47-46 Vernon Blvd., Second Floor, in Long Island City. If you have any questions or require additional information, please call John at 718-707-0955. LIFE INSURANCE AWARENESS MONTH September is Life Insurance Awareness Month (LIAM), a great opportunity to get educated on the importance of life insurance. It can seem daunting to get all your financial ducks in a row. But the beauty of any journey: It doesn’t happen all at once. Step by step. Goal by goal. Do that next good thing by putting financial protection in place with life insurance. Then, no matter what happens in your financial—or life— journey, your loved ones will be OK financially. Take that first step on your financial fitness journey today by contacting Adalberto Garcia for your free consultation at: (407) 749-9526 or Advisors@ Savignano-CPA.com. Taxes in Retirement Retirement planning has three main components. 1. How much income will you probably NEED to maintain the lifestyle you want? 2. Then you estimate how much money you probably will HAVE from all sources. 3. That leaves you with an amount you need to SAVE personally to make up for the shortfall. When analyzing how much you should SAVE to make up for any shortfall, TAXES often play a significant role in decision making. To learn and see how taxes will play a role in your retirement, contact our advisor, Adalberto Garcia for a free consultation at: (407) 749-9526 or Advisors@ Savignano-CPA.com.