Home Ownership Deductions Limited for Itemized Returns in 2018

For those who continue to itemize their deductions, the Tax Cuts and Jobs Act (or TCJA) has installed several limits on deductions for home owners. First, taxpayers can only deduct mortgage interest resulting from up to $750,000 of debt ($375,000 for those filing single or married filing separately). IRS Publication 936 summarizes the limitations (https://www.irs.gov/publications/p936#en_US_2018_publink1000229991),…

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What is “Donation Bunching”?

In all the talk about the Tax Cuts and Jobs Act, you may have heard about the terming “bunching donations” being thrown around. What is it? Can it help your tax return? “Donation bunching” is a tax strategy to attempt to maximize your tax deductions. Prior to 2018, it was much easier for taxpayers to…

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How to respond to an IRS “Love Letter”

Aside from being summoned for Jury Duty, receiving a “love letter” from IRS is possibly the worst kind of mail anyone can receive. Here are seven quick tips on how to survive getting a notice from the IRS this Valentine’s Day: Don’t Panic. Everyone gets mail from the IRS sooner or later. Most letters are…

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Don’t Underestimate Your Housing Allowance!

In our last article about the Clergy Housing Allowance, we discussed the fact that if you don’t properly designate and document a Housing Allowance, IRS could end up disallowing it. Even when you properly document a Housing Allowance, there is an additional risk that we should discuss: designating too little. Consider the following scenario: A…

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Tax Season means more IRS Scams

As we inch closer towards April 15th, the number of phone calls pretending to be IRS will become more frequent. These scams take advantage of the public’s fear of IRS, making it sound like the victim will go to prison if they don’t agree to pay up. Even worse, these scams are getting more sophisticated…

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How to Properly Designate a Housing Allowance

Do you get paid an allowance for housing? Are you sure that it’s set up correctly? Double checking your housing allowance is an easy way to avoid annoying tax headaches later. In order to take a housing allowance, there needs to be proper documentation: A specific dollar amount or percentage of salary must be designated,…

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Miscellaneous Itemized Expense Deductions Cut in 2018

The Tax Cuts and Jobs Act is changing a lot this year, for better and for worse. One of the bigger changes to 1040 returns is the loss of miscellaneous itemized expenses on Schedule A. What sort of things are included in miscellaneous itemized expenses? Here are some examples: Tax preparation fees Investment fees Safety…

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2018 Webinar for Clergy W-2 Forms

Filing clergy returns can be an intimidating and even confusing process to the uninitiated. Practitioners and bookkeepers unfamiliar with clergy tax law will quickly find that Clergy W-2 forms differ slightly from regular W-2 forms. Often Social Security and Medicare withholding will get reported by mistake when they should not. Sometimes housing allowance or parsonages…

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W-2 and 1099 Deadline Approaching

January is here, bringing with it a new tax year and (you guessed it) new tax deadlines. W-2 and 1099 filings can be especially important for smaller organizations, who can be caught unaware that failing to file these forms timely causes stiff penalties. According to IRS’s instructions, employers must complete Form W-2, furnish a copy…

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