Deducting State and Local Income Taxes

Most individual tax payers follow the cash receipts and cash disbursement basis rules. This means income is income in the year you receive or are entitled to receive the income. Expenses are expenses in the year you pay the expense. You can make the payment in cash, by check or by credit card. So, in order to deduct a tax payment you must actually pay it. If you pay your real estate taxes to the bank as part of your mortgage payment, you can only deduct the amount the bank actually disbursed to the town. When you make the payment to the bank, the bank is acting as your agent; they are holding your money. When the bank makes the payment, it is as if you are making the payment to the to

Property tax prepayment? Here are the answers | Biz Brain

A look at whether it's worth prepaying property taxes in the wake of the GOP tax plan.(click/morguefile.com) ** Addition on Dec. 27: Despite Gov. Christie's executive order requiring that municipalities in New Jersey allow homeowners to prepay 2018 property taxes (as long as the payments are postmarked by the end of the year, which is Sunday), the IRS has issued guidance that only taxes that have been assessed by municipalities may be prepaid and deducted for 2017. Tax experts are still debating whether that means you can only deduct prepaid taxes that have been billed. Stay tuned for more. Q. I am looking for clarification concerning prepayment of property taxes. Given the changes to the ta

Property tax prepayment? Here are the answers | Biz Brain

Advisors have been responding to emails, writing blogs, updating their Twitter accounts and even running client tax returns with the new rates to keep antsy investors informed about the most sweeping tax overhaul in more than a quarter century. Good news can be easy to communicate. In order to help investors understand exactly what their taxes will look like next year, Bernard Kiely, president of Kiely Capital Management, Morristown, N.J., has applied the tax plans’ new rates to clients’ 2016 income tax returns. “So far, I’ve run about half of my clients’ taxes and every one of them will see lower taxes in 2017,” Kiely told Financial Advisor magazine. Other Articles: Year-End Tax Planning Un

Advisors Work Overtime to Manage Investors’ Tax Reform Expectations

Advisors have been responding to emails, writing blogs, updating their Twitter accounts and even running client tax returns with the new rates to keep antsy investors informed about the most sweeping tax overhaul in more than a quarter century. Good news can be easy to communicate. In order to help investors understand exactly what their taxes will look like next year, Bernard Kiely, president of Kiely Capital Management, Morristown, N.J., has applied the tax plans’ new rates to clients’ 2016 income tax returns. “So far, I’ve run about half of my clients’ taxes and every one of them will see lower taxes in 2017,” Kiely told Financial Advisor magazine. One of Kiely’s clients who earns approxi

How to avoid tax underpayment penalties | Biz Brain

Aim for the right strategy to avoid getting hit with a tax penalty for underpayments. (mconnors/morguefile.com) ** Addition on Dec. 27: Despite Gov. Christie's executive order requiring that municipalities in New Jersey allow homeowners to prepay 2018 property taxes (as long as the payments are postmarked by the end of the year, which is Sunday), the IRS has issued guidance that only taxes that have been assessed by municipalities may be prepaid and deducted for 2017. Tax experts are still debating whether that means you can only deduct prepaid taxes that have been billed. Stay tuned for more. Q. 2017 is the first year I am taking a Required Minimum Distribution. It will be $30,000. My 2016

Advisors Eye Tax Reform Uncertainties, Implications To Clients

While Congress continues to debate the most massive overhaul of taxes since the 1980s, financial advisors are doing the same. Advisors disagree on how to handle the waiting on whether state and local tax deductions will be lost, but all say clients and advisors have to be aware of the possibilities and poised to act. “It seems to be a done deal that taxpayers will no longer be able to deduct state and local taxes from federal income tax,” said Bernard Kiely, founder of Kiely Capital Management Inc. in Morristown, N.J. “But I’m afraid, other than moving, there may not be much a person can do” to combat the increase in taxes that many will be subject to in high tax states like New Jersey. “The

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Kiely Capital Management offers financial planning and investment advice. Serving Central and Northern New Jersey, Yvonne and Bernard (Bernie) Kiely provide over 25 years of experience offering discretionary asset management, retirement planning and income tax preparation. KCM is registered with the State of New Jersey as a Registered Investment Advisor.

 

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