Investors largely expected the FOMC to cut rates by a quarter point.The Fedread more
The lack of clarity surrounding the U.S.-China trade war is what's really hitting global growth, says ex- Deputy Treasury Secretary Sarah Bloom Raskin.World Economyread more
China's economy has long relied on factors such high levels of investments and an expanding labor force for growth. Those growth drivers are running out of steam.China Economyread more
India could benefit from the fallout in the U.S.-China trade war, experts told CNBC — but much-needed reforms on land and labor could prove to be a challenge for companies...Asia Economyread more
New crash tests show the Tesla Model 3 and the Audi e-tron, are among the safest models out on the road. The results bolster the theory electric vehicles may be better...Autosread more
U.S. consumers and growth in sectors such as technology have offset declines in other American industries, says Tom Finke, chairman and CEO of investment management firm...US Economyread more
The FAA administrator's comments come on the eve of his visit to Boeing facilities outside Seattle. While there, he's scheduled to meet with Boeing executives and be briefed...Airlinesread more
Last weekend's attacks on oil facilities — and the spike in crude prices that followed — should show that the world needs to stop relying on oil, says Helen Clark.Energyread more
The photo depicts Canadian leader Justin Trudeau wearing a turban and robe, with dark makeup on his hands, face and neck. Liberal Party spokesman confirms the photo is of...Electionsread more
As the Fed was meeting to consider cutting interest rates, it lost control of the very benchmark rate that it manages.Market Insiderread more
CBS, CNN and other major media companies are starting to pull e-cigarette advertising off their airways, as the death toll from a mysterious vaping-related illness continues...Health and Scienceread more
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 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 and an overhaul of the that applies to your wages.
Even your income tax return — Form 1040 — is getting a makeover: It will be postcard-sized, with filers will need to wade through in order to claim above-the-line deductions and credits.
“Be prepared for your return to look a lot different than it did last year,” said Tim Steffen, director of advanced planning at Robert W. Baird & Co. “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.
Under the new law, the IRS overhauled the , 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.
“It’s the worst surprise if you’re under-withheld,” said certified financial planner Debbie J. Freeman, CPA and director of financial planning at Peak Financial Advisors. “I’ve been encouraging a withholding review, especially if you’re an employee in a dual income household.”
Start here with the IRS’s withholding calculator.
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.
Review your Schedule A, which lists itemized deductions, and strategize with your accountant.
For instance, now might be the time to fight back on high property taxes.
“We are encouraging people to examine their property assessments,” Freeman said. “Don’t be afraid to challenge it and try to get it reduced as much as you can.”
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, Freeman explained.
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, said Jeffrey Levine, a CFP/CPA and CEO and director of financial planning at BluePrint Wealth Alliance.
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.
You can use taxable account dollars to pay your Roth IRA’s costs. This way, you leave your Roth IRA — a pot of tax-free retirement savings — to continue growing.
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.
This is known as .
“My suggestion is to do zero or close to zero giving in one year and take the standard deduction,” said Jeff Fosselman, CPA and senior wealth advisor at Relative Value Partners in Northbrook, Illinois.
“The following year, load all of your charitable giving for two years into one,” he said.
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,” said Steffen.