Skip to main content
Monthly Archives

October 2018

Tax Cuts and Jobs Act of 2017: Estate Taxes

By Tax Law

The recent Tax Cuts and Jobs Act brought with it many changes to federal tax law. In this series of blog posts, we explore what’s new in taxes.

Federal estate taxes are now only applicable to individuals with a taxable estate exceeding $11.2 million and to married couples with a taxable estate exceeding $22.4 million. In 2025, the federal estate tax is set to revert back to the exclusion amounts applicable in 2017.

In Florida, there is no state inheritance tax, so persons with assets of up to $11.2 million or couples with assets of up to $22.4 million do not need to worry about the impact of death taxes on the inheritance they leave to their heirs. The “generation skipping tax” has now also been effectively eliminated for combined estates less than $22.4 million between husband and wife, so it is now possible to establish so-called “dynasty Trusts” in Florida without worrying about subsequent generations inheriting extra generation-skipping taxes.

Attorney Fred Jacobs of Bach, Jacobs & Byrne, P.A. is a Florida Board Certified Tax Law attorney who can advise you throughout the tax planning process. Call (941) 906-1231 to set up a consultation to review your situation.

October 30, 2018
Love0

Tax Cuts and Jobs Act of 2017: Income Taxes

By Tax Law

The recent Tax Cuts and Jobs Act brought with it many changes to federal tax law. In this series of blog posts, we explore what’s new in taxes.

The seven-bracket structure for income taxes has been retained, but there are generally slightly lower tax rates. The marriage penalty is mostly gone, as married filing thresholds and tax rates are now exactly double the single thresholds for all but the two highest brackets.

In terms of personal exemptions: whereas the old system provided $4,150 personal exemptions plus $6,500 standard deductions (for a total of $10,650 per individual, or $21,300 per couple), the new system eliminates personal exemptions in favor of a $12,000 standard deduction per person, or $24,000 per couple.

Attorney Fred Jacobs of Bach, Jacobs & Byrne, P.A. is a Florida Board Certified Tax Law attorney who can advise you throughout the tax planning process. Call (941) 906-1231 to set up a consultation to review your situation.

October 26, 2018
Love0

Tax Cuts and Jobs Act of 2017: Capital Gains Taxation

By Tax Law

The recent Tax Cuts and Jobs Act brought with it many changes to federal tax law. In this series of blog posts, we explore what’s new in taxes.

Capital gains taxes have remained basically the same. Short-term capital gains (assets held less than one year) are still taxed as ordinary income. However, long-term capital gains tax rates are now based on the following taxable income levels, instead of on the old marginal tax brackets:

Long-Term Capital Gains Rate Single Return Taxable Income Joint Return Taxable Income
0% for taxable income up to $38,600 $77,200
15% for taxable income up to $425,800 $479,000
20% for taxable income up to $425,800 $479,000

 

It is important to note that alternative minimum tax rates still apply to long-term capital gains. In 2018, an alternative minimum tax of 28% will apply to any alternative taxable income (including long-term capital gains) in excess of $95,750 for single returns and $191,500 for joint returns.

Attorney Fred Jacobs of Bach, Jacobs & Byrne, P.A. is a Florida Board Certified Tax Law attorney who can advise you throughout the tax planning process. Call (941) 906-1231 to set up a consultation to review your situation.

October 22, 2018
Love0

Tax Cuts and Jobs Act of 2017: Expanded Child Tax Credit

By Tax Law

The recent Tax Cuts and Jobs Act brought with it many changes to federal tax law. In this series of blog posts, we explore what’s new in taxes.

            The child tax credit has been doubled from $1,000 to $2,000 for children under age 17. The refundable amount has also been increased up to $1,400. Finally, “phase-out” thresholds for the child tax credit have been increased to $200,000 of taxable income for individuals and $400,000 for joint returns.

            Attorney Fred Jacobs of Bach, Jacobs & Byrne, P.A. is a Florida Board Certified Tax Law attorney who can advise you throughout the tax planning process. Call (941) 906-1231 to set up a consultation to review your situation.

October 18, 2018
Love0

How is the guardian of a person’s property selected?

By Guardianship

The guardian of the property is appointed by the Florida circuit court for a ward who lacks sufficient capacity to manage his/her own assets, when no lesser restrictive alternatives are available. Typically, this guardian will be a family member of the ward, though not always. In order to be named by the court, a potential guardian must fulfill broad statutory. Florida law requires that the guardian be:

-A Florida resident over the age of 18 years old; or

-A non-resident who is directly related, related by marriage, or legally adopted by the ward; and

-Never convicted of a felony

*There are also provisions in the Florida guardianship law for banks, trust companies, and non-profits to serve as guardians.

It is up to the courts to determine the fitness of guardians beyond these requirements. This fitness test can be comprised of background checks, credit checks, and whatever else is ordered by the court – however, in Florida, guardians are required to take a court-approved family guardianship course.

The preferences of the ward in choosing his/her guardian are significant, but not given ultimate authority. Often, wards will have named a pre-need guardian in the event of future incapacity; it is this individual who is usually given priority in the guardianship selection process. The attorneys at Bach, Jacobs & Byrne, P.A. represent guardians – both professional and family guardians – in guardianship court proceedings.

October 16, 2018
Love0

Tax Cuts and Jobs Act of 2017: Deductions

By Tax Law

The recent Tax Cuts and Jobs Act brought with it many changes to federal tax law. In this series of blog posts, we explore what’s new in taxes.

There have been significant changes to deductible expenses under the new tax law:

  • Mortgage interest deductions for new mortgages are now available only for up to $750,000 for residential mortgages. Previously, the deduction was available for up to $1,000,000.
  • Home equity interest is no longer deductible.
  • The charitable contribution itemized deduction remains, and one can now deduct as much as 60% of adjusted gross income (up from 50%) for contributions to qualified public charities.
  • Medical expenses in excess of 7.5% of adjusted gross income are still deductible. Previously, this deduction was up to 10%.
  • Casualty losses are no longer deductible, except within federal-declared disaster areas.
  • Itemized deductions for state and local taxes now cannot exceed $10,000 on a single or joint return.
  • There are no longer deductions available for investment advisor fees, tax preparation fees, unreimbursed employee expenses, or safe deposit box fees.

            Attorney Fred Jacobs of Bach, Jacobs & Byrne, P.A. is a Florida Board Certified Tax Law attorney who can advise you throughout the tax planning process. Call (941) 906-1231 to set up a consultation to review your situation.

October 12, 2018
Love0

What is the look-back period for gifts made by a Medicaid applicant or spouse?

By Asset Protection Planning, Elder Law, Medicaid Planning

Because Medicaid applicants must have limited income and assets in order to qualify for Medicaid, a scenario may arise wherein an otherwise well-off applicant gives away all of his/her assets as gifts just before applying. To combat this practice, Medicaid instituted the “look-back period.” This refers to the time period prior to the application for which Medicaid will consider gifts made by an applicant or spouse.

In every state but California, the look-back period is 5 years. This means that, if one applies on August 3rd, 2018, Medicaid will count any gifts (assets given away for free or for less than their market price) dating back to August 3rd, 2013 against the applicant. If an applicant is found to violate the look-back period, Medicaid penalizes him/her by rendering them ineligible for Medicaid until a certain amount of time has passed. This amount of time is determined by the formula: [dollar amount of transferred assets] ÷ [average monthly private patient rate of nursing home care].

So, if you are applying for Medicaid and are found to have gifted $45,000 in assets two summers ago, and Florida’s average monthly private patient rate for nursing home care is $9,000 (to be exact, $9,171, as of 07/01/18), you will be ineligible for Medicaid for 5 months. [45 ÷ 9 = 5]

October 8, 2018
Love0

How has the capital gains tax changed, and how does it affect me?

By Tax Law

In the Tax Cuts and Jobs Act of 2017 signed into federal law in December, the American tax code underwent many changes. However, the capital gains tax structure has, for the most part, stayed the same.

Short-term capital gains, on assets held for a year or under, maintain their taxing status as ordinary income. Long-term capital gains, for assets held for more than a year, maintain their status as taxed based on tax bracket: 0%, 15%, or 20%.

The biggest difference to note here is that the income thresholds for many tax brackets have been raised; thus, the marginal tax rates have been lowered, and in general, this has resulted in short-term capital gains tax cuts.

October 4, 2018
Love0

Tax Cuts and Jobs Act of 2017: LLC, Partnerships, S Corps, and Sole Proprietors

By Tax Law

The recent Tax Cuts and Jobs Act brought with it many changes to federal tax law. In this series of blog posts, we explore what’s new in taxes.

            There is now a 20% deduction for this “pass-through” income. However, for professional services providers like lawyers, doctors, and accounts, only the first $157,000 is deductible for single filers (and only the first $315,000 for joint filers). It is important to note that the 20% deduction does not apply to passive investments in LLCs, Partnerships, and S Corps.

            Attorney Fred Jacobs of Bach, Jacobs & Byrne, P.A. is a Florida Board Certified Tax Law attorney who can advise you throughout the tax planning process. Call (941) 906-1231 to set up a consultation to review your situation.

October 2, 2018
Love0