A Whole New Ballgame:
Tax Reform Effects on Individuals and Businesses

Click Here to download a pdf version of this 2018 Tax Reform Guide!

For most taxpayers, the sweeping changes to federal tax laws enacted by Congress at the end of 2017 will be most apparent when it comes time to report 2018 income. But smart taxpayers will make an effort to understand these changes in advance, since many of the decisions we make are based upon past tax consequences that no longer apply. Now that we can no longer rely on a lot of those assumptions, it’s a good time to dive in for a closer look at the new tax laws and think about the wisest course to plan for your financial journeys in 2018 and beyond. You’ll also pick up some strategic tax planning tips that can reduce future taxes.

This guide is intended to give an overview of the new tax reform law, organized to highlight those changes likely to have the most significant impacts on the individual and business activities of our clients. It would be impossible (not to mention tedious) to give a comprehensive accounting of all the changes large and small – the final language in the reconciled conference report was 1,097 pages. It will take several years, if not a decade, before regulations are firmed up as tax court rulings provide interpretive guidance to all the changes to the tax code. However, some things we do know for sure. Many of the rates and formulas have changed to a significant degree so that old assumptions are now playing into a whole new ballgame, creating multiple traps for the unwary. Here is an overview of the most important changes to the tax code that you’ll need to understand right now.

Tax Reform Effects For Individual Taxpayers

1. Changes to Income Tax Brackets

There are still seven federal income tax brackets — but at slightly lower rates and adjusted income ranges. Here’s a peek at two of the most common filing categories, comparing old vs. new tax brackets:

Rates for Single Taxpayers

Rates for Married Filing Jointly

Source: Skye Gould/Business Insider

New Brackets & Tax Rates For Other Filing Status

2. Increased Standard Deduction, Fewer Itemized Deductions

One of the goals of tax reform was simplification for the individual taxpayer based on this proposition: increase standard deductions to reduce the number of taxpayers itemizing deductions.

High income earners with qualifying deductions may still find it advantageous to itemize, even though limits have been placed on many of the items they’ve fully deducted in the past.

State and local taxes limitation: The state and local income tax deduction will be limited to $10,000 annually for most filing statuses. (Married Filing Separately is $5,000 each.) This will hurt anyone living in areas with high state and local tax rates, and higher income earners ($200,000+) no matter where they live.

Mortgage interest: Mortgages closed after 12/15/17 (or 4/1/18 if a written contract existed prior to 12/15/17) will have mortgage interest limited on mortgages greater than $750,000. Existing mortgages will be treated as they were, with a $1,000,000 threshold for interest limits. Debt that is refinanced for loans exisiting prior to 12/15/17 is grandfathered in, with some qualifications.

Home equity loan interest: Starting with 2018 income tax returns, interest on home equity lines of credit is no longer deductible. If you had planned on using funds from a HELOC for seeding other types of investments, you will need to factor in that higher debt cost. Second mortgages used for substantial home improvements still qualify for the mortgage interest deduction.

2% limitation: The 2% of Adjusted Gross Income (AGI) limitation on miscellaneous itemized deductions (tax prep fees, investment management fees, unreimbursed work expenses) has been eliminated.

Casualty and theft losses: This deduction has been eliminated, unless the loss takes place in a federally declared disaster area or if the loss is used to offset a casualty gain. This is a good time to check your casualty insurance policies to make sure all your real and personal property is adequately covered, since you can no longer use such losses to reduce taxes.

Moving expenses: Moving expenses are no longer tax deductible, unless the taxpayer is in the armed forces and the move is due to a permanent station change.

Charitable donations: These are still deductible, but you will only receive the tax benefit if you itemize. If you can itemize then it makes sense to itemize and claim your charitable contributions.

Athletic Ticket Donations: The 80% deduction that could be taken for charitable contributions which provide seating priority benefits is no longer available.

The combined effect of all the above means that fewer people will itemize their deductions. To that extent, one major tax simplification goal will have been achieved.

3. No More Personal Exemptions

Whereas before you could deduct personal exemptions of $4,050 for yourself and everyone in your household (subject to phaseouts), these personal exemptions are now eliminated. This elimination is intended to be offset by the increase in standard deduction. Eliminating personal exemptions will have the most significant impact on families with more children, especially those with dependent children over the age of 17 (such as college students).

4. Other Changes Affecting Taxable Personal Income

Child Tax Credit: The child tax credit (previously $1,000 per child per child under age 17) has been increased to $2,000 per qualifying child. They’ve also increased the phase-out levels to $400,000 for Married Filing Jointly (MFJ) and $200,000 for Single filers.The refundable portion of the child tax credit (where you might receive back more in a refund than you paid in taxes) is limited to $1,400 per child. A $500 credit is allowed for any dependent who is not a qualifying child.

529 Savings Plans: They’re not just for college any more. Starting in 2018, $10,000 per student can be used for elementary through high school tuition. College use of a plan does not face the $10,000 annual limit.

Child Tax Rates: The “Kiddie Tax” – where a dependent child’s investment income was taxed at the typically higher rates of their parent – has been modified.

Alternative Minimum Tax: The dreaded Alternative Minimum Tax (AMT) has higher exemption amounts and while it still exists, it is expected to impact fewer individuals.
Gift taxes: The gift tax exclusion has been increased to $15,000, from $14,000.

Estate Taxes: The Estate Tax exemption has increased to $11,200,000 for individuals, and $22,400,000 for married couples.

Due to the last two changes described, high net worth individuals may want to consider revisiting their estate and gifting strategy.

5. Changes that Start in 2019 and Beyond

If you’re getting divorced, alimony related payments won’t be counted any more. Beginning with divorce settlements and agreements enacted in 2019 and later, payments related to alimony agreements are no longer deductible for the payer, and will not be considered income to the recipient. Anything in place before 2019 will be grandfathered in (meaning still deductible on one side and taxable income on the other side).

You’ll no longer pay a penalty if you don’t purchase individual health insurance; the Affordable Care Act “Individual Mandate” goes away. The shared responsibility payment owed if a taxpayer doesn’t enroll in a health insurance plan is repealed, starting in 2019.

Some of the changes are temporary. Most of the individual tax rate changes are scheduled to revert back to the old code after 2025.

Tax Reform Effecting Business Owners, Professional Corporations & Real Estate Investors

1. C Corporations Deserve a Closer Look

C Corporation income is now taxed at a flat 21%. This includes many types of small businesses and personal service corporations such as medical, legal and accounting practices, which were previously taxed at a flat 35%. Dividends paid from a C Corporation will still be taxed at the individual level, but the decreased C Corporation rate makes them more attractive. Some C corporations meeting certain conditions qualify their shareholders for a capital gain exclusion on sale of corporate stock, increasing their advantages even further.

C Corporations are excluded from the new rules on Qualified Business Income, discussed below.

 

2. A Big New Tax Cut on Pass-Through Business income.



Qualified Business Income (QBI) Under Tax Reform

Pass-through income from sole proprietorships, S corporations or entities such as LLCs that are a qualified trade or business can receive up to a 20% deduction of their income that is generated from the qualified trade or business. Income from real estate assets would typically fall under QBI tax treatment. The end result of the QBI deduction is a lower income tax rate on the pass-through business income. One of the wrinkles is that S Corporation shareholder wages do not count as qualifying business income (i.e. they do not receive a 20% deduction). Do not interpret this to mean that S corporations are going to necessarily be less advantageous than other pass-through options. The IRS still requires S Corporation shareholders to take a reasonable salary.

The QBI deduction is very complicated and convoluted, despite Congress’ stated goals of simplification. One of the points of confusion is how different types of businesses are treated differently for the QBI deduction phaseout.

QBI Deduction Limitations
If personal taxable income is greater than $315,000 for MFJ, or $157,500 for other statuses, then the 20% QBI deduction can be limited.
For many businesses subject to the limitation, the 20% deduction is limited to the greater of
1) 50% of the W-2 wages paid for business , or
2) The sum of 25% of W-2 wages plus 2.5% of the unadjusted basis of all qualified business property that hasn’t been fully depreciated.

QBI Deduction Limitation That Is Treated Differently
For QBI deduction limitation purposes, most service based businesses or those businesses whose primary asset is the reputation of the owner or an employee(s) are treated differently. (Think law firms, doctors, dentists, etc — but architects and engineers don’t fall under this definition.)
For these types of businesses, the 20% QBI deduction is phased out between $315,001-$415,000 for Married Filing Jointly, or $157,501 to $207,500 for individuals and heads of household. It’s not subject to the the QBI deduction limitations previously referenced; it is simply phased out, and the benefit is lost. This phaseout can result in a mind-boggling, almost 70% effective marginal tax on income earned above the phase-out range as the deduction is lost on income that was previously eligible.

3. Other Changes Affecting Business Taxes

Depreciation

  •  Computers are no longer considered listed property, which will make them easier to depreciate more quickly.
  • The annual 179 depreciation limit was increased to $1,000,000 (up from $510,000). The phaseout threshold was increased to $2,500,000.
  • 100% bonus depreciation is allowed on both used and new property.

All of this means it will be easier to expense business equipment in the first year.

Accrual Method of Accounting
As of 2018, both C corporations and flow-through entities (partnerships and S corps) can use the cash method of accounting for tax purposes if average 3 year gross receipts are less than $25,000,000.

Uniform Capitalization Rules (UNICAP)
The UNICAP rules for inventory calculations now only apply where the three-year gross receipt average is greater than $25,000,000.

Business interest deductions
Limited to 30% of Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) for businesses that have averaged greater than $25,000,000 in revenue over the last 3 years. Motor vehicle dealers using loans for floor plans are not subject to this limitation.

Net Operating Losses (NOLs)
Can no longer be carried back- they can still be carried forward, but carry-forward can only offset 80% of taxable income.

1031 like-kind exchanges
Now allowed only for real estate.

Domestic Production Activities Deduction
Eliminated for 2018, except for C corporations which have until 2019.
No more full deductions for fringe benefits – Items like office food for employees are now subject to a 50% M & E deduction limitation. The company-paid entertainment expense deduction is eliminated. (Office parties just got a lot more expensive.)

Knowledge is Empowering, While Smart Planning Wins the Day.

Even in normal times, learning how to minimize your tax liability is both an art and a science. In this year’s rapidly changing tax environment, it’s essential that you work with a CPA firm whose professionals understand both you and how the tax laws and regulations are changing, and may continue to change. It’s reckless to assume from the headlines that you will be better off under the new tax laws; there are still too many moving parts.

Don’t assume that any previous tax structuring you’ve done is still optimal. Whatever you do, don’t wait until 2019 to discover that you could have done something today to lower your taxes significantly for all of 2018. We look forward to helping you assess your situation, weigh your options, and to help with making any structural changes that can minimize your annual tax bills going forward.

Our 2018 Tax Reform Challenge

At Adam Shay CPA, PLLC, we have set an audacious goal for 2018: We are striving to save our clients a combined $1 MILLION on their 2018 income taxes!

It’s a tough challenge, but we’re ready. We’ll be looking under every rock and crevice of the new tax code to find every possible savings for every single one of our clients that engages us for this purpose, in order to meet our cumulative million dollar goal and to help our clients maximize their post tax cash flow.

To participate in our Challenge:
1.Book an appointment this spring for a Tax Reform assessment.
2. Call (910) 256-3456 or email [email protected] to inquire about our full suite of business and personal income tax services.
3. Attend one of our tax reform webinars.
4. Share this guide with a friend who needs help navigating the new tax reform provisions.

To stay connected and updated join our email newsletter.

2018 Tax Reform Impact on 2017 Income Taxes

Update 12/28/17 4:37 PM

There have been lots of questions about prepaying property taxes this week.  The IRS issued guidance on Wednesday that in order for paid property taxes to be deductible in 2017 they have to have already been assessed- i.e. a bill needs to exist against which to apply a payment.  Stated another way, you can not assume your 2018 property tax bill (in New Hanover County that bill would be the one due 1/5/19) will be the same as the current one, prepay it in 2017, and claim the deduction for it.  Most people should be OK with what you’ve been doing (paying existing property tax bills) but we wanted to spread the word in case you are thinking about getting crazy with your prepayment of property taxes.

Update 12/23/17 9:45 AM

The tax reform bill has now been signed into law.

Business Owners

On the business side, the name of the game (where you can) is to defer income and accelerate expenses. On the income side if you have receipt of income you need to recognize it as income. Something easier to control is accelerating expenses (paying expenses for the future now). You can’t prepay too far into the future (beyond 12 months) or else you no longer have an expense but instead have a prepaid asset. You can only deduct expenses for service related contracts (think cleaning service) for those services provided within 3 1/2 months. If you are considering a prepayment of an expense, consult with us first to make sure there are not any surprises that will cause issues down the road. For example, there are special considerations regarding prepayment of rent.

One of the 2017 tax law changes on the business side is that for equipment bought and placed in service after 9/27/17 (yes, that’s the correct date) you can claim 100% bonus depreciation (expense the entire amount) for both new and used (new to you) equipment. Vehicles have some other limitations- so if you are looking at a business vehicle for this provision be sure to let us know.

Update 12/20/17 4:25 PM

All the bill is waiting on is for signature from the President.  That may not happen until early 2018, due to budget rules and impacts.  A new update with some thoughts focused on itemized deductions is below:

Itemized vs Standard Deductions

One of the big changes of the 2018 income tax reform is that fewer people are going to itemize their income tax deductions due to increases in the standard deduction (differences in standard deduction shown below).  Itemizing deductions means deducting things like medical expenses, state and local taxes, mortgage interest, and charitable contributions, among others.   In addition, if you itemize in 2018 and beyond, the state income, property, and real estate tax deductions are capped at $10,000 per year.  Finally, itemized deduction subject to the 2% of your Adjusted Gross Income (AGI) limitations will not be available beyond 2018.  This includes items like individual tax preparation, unreimbursed work expenses, financial advisor fees. If your standard deductions are greater than your itemized deductions then you want to take the standard deduction to minimize your income tax.

What does this mean for me in 2017?

In general, income tax rates in 2018 will be lower than 2017 – providing an opportunity for tax arbitrage.  Stated another way, a deduction in 2017 is worth more than a deduction for the same situation in 2018.  We recommend evaluating how close to the new standard deduction you will be.  Will you itemize in the future?  Should you be paying additional state and local taxes in 2017 (be careful of the Alternative Minimum Tax)?  Should you be making more charitable contributions in 2017?

We know tax preparation fees, unreimbursed employee expenses, investment advisor fees will not be deductible on individual income tax returns in 2018 and beyond (they will still be for businesses).  Should and can you pay those in 2017?

What does this mean for me in 2018 and beyond?

Again, you’ll need to evaluate how close you are to the standard deduction threshold.  If you are over the threshold, then continue business as usual with your itemized deductions.  If you are close to or below the itemized threshold, consider paying 2 years of real estate taxes in one year (assuming it doesn’t push you over the $10,000 tax deduction limit), consider the timing of start of year and end of year mortgage payments, and consider doing charitable contributions for multiple years in one year.  In short, while it may appear that there is not a way to get a benefit out of itemized deductions, if you are smart about it and craft your strategy you may be able to do so.

As always, tax advice and tax planning are specific to your situation.  This document is intended to educate you on some of the issues tax reform planning ideas for 2017 and beyond.  Please reach out to us so that we can help you with your specific situation and ensure that you are making the appropriate decisions and taking the appropriate action before year-end.

Update 12/18/17 7:47AM:

The federal income tax reform situation is still pretty fluid.  However, it is expected that it will pass congress and get enacted into law.  Most of the changes are for 2018 and beyond, however you may still want to consider 2017 actions before the year is up.

  • Evaluate your 2016 federal income tax return.  Did you itemize deductions (does your return include a Schedule A after the first two pages of your 1040)?  If not, there’s not a lot specific to 2017 and income tax reform that you can do for income tax planning.
  • If you did itemize, how close was your itemized amounts to the new 2018 itemized minimums ($12,000 for single, $24,000 for a married couple)?  If below these new thresholds for your filing status, you may not end up itemizing in the future and may need to cram in as many additional itemizations as you can in 2017.  You do, however, have to be careful of impacts of Alternative Minimum Tax (AMT) on your itemized deductions.  In layman’s terms, with AMT your income tax is calculated a second way and you are assessed the worst tax of the two scenarios.
  • How much did you itemize in taxes you paid (line 9 of Schedule A)?  Under the new tax code, the deduction for state income, property, and real estate taxes will be limited to $10,000 annually.  If you have been close to or exceeded $10,000, you may want to consider what state income taxes or property taxes you can pay in 2017 since you will be losing part of the deduction in 2018.  The new bill specifically spells out that you can’t prepay 2018 state income taxes to get a 2017 federal deduction, but does it make sense for your scenario to prepay 2017 state income taxes?  Upcoming property taxes?  If so, how much?  Again, this is an area where you want to be really careful of any unexpected AMT impact.
  • There is potential tax arbitrage between 2017 and 2018 income tax rates.  As much as you have control over it, you may want to consider deferring income and accelerating expense in 2017. Realize, however, that you have to recognize income when you have constructive receipt of the income.

As always, tax advice and tax planning are specific to your situation.  This post is intended to educate you on some of the issues regarding 2017 and income tax reform.  Please reach out to us so that we can help you with your specific situation and ensure that you are making the appropriate decisions and taking the appropriate action before year-end.

Forensic and Fraud Accounting Fuels Growth at Wilmington’s Adam Shay CPA

PRESS RELEASE

Contact:
Richard Pasquantonio
[email protected]
910-256-3456

Michael Angerhauser Joins to Expand Forensic Practice for Accounting Firm

Wilmington, NC – September 14, 2017 – Experiencing an increase in the need for forensic and fraud accounting, Adam Shay, CPA PLLC has further strengthened its fraud investigations and forensic accounting services by adding Michael Angerhauser to the team. With 35 years of accounting and law enforcement experience, Angerhauser’s Big 4 accounting experience enables enhanced strategic counsel for attorneys and private companies throughout the southeastern United States. The focus includes fraud investigations, Independent Private Sector Inspector General (“IPSIG”) integrity compliance monitoring, litigation support services, family, white collar crime, and insurance disputes, among others.

“The addition of Michael Angerhauser to our team demonstrates our commitment to making Adam Shay CPA, PLLC North Carolina’s leading forensic accounting firms,” said Richard Pasquantonio, CPA, who is currently leading the forensic and fraud practice at the firm. “Michael adds gravitas to what we see as the region’s next generation of accounting leadership, building solidly on the trust we’ve earned from our clients over the past 7 years, extending our existing forensic services to include independent integrity monitoring compliance and financial crime investigations”

Michael Angerhauser joins the firm from New York, where he most recently was Principal at Berdon LLP’s litigation, valuation and dispute resolution practice. Prior to Berdon, Michael was a Senior Director at Navigant Consulting, Inc. and a Manager in a KPMG’s Forensic Practice. Michael is a retired Lieutenant from the New York City Police Department with extensive experience managing and conducted criminal and internal investigations. He received his Bachelor in Accounting and Certificate in Forensic Accounting from New York University, and holds numerous certifications, including membership in the American Bar Association, American Institute of CPAs, Association of Certified Anti-Money Laundering Specialists, and NYSSCPA’s Anti-Money Laundering / Terrorist Finance Committee.

“It’s an honor to join the next generation of accounting firms in North Carolina,” said Angerhauser. “It’s a great opportunity to bring my expertise in fraud and forensics to a team that knows how to align with the needs of attorney and business clients by translating complex information into compelling communications.”
About Adam Shay, CPA

Headquartered in Wilmington, NC, Adam Shay CPA serves private companies headquartered throughout the southeastern United States. The firm’s fixed price approach combines with unique use of technology to provide a proactive approach to financial accounting services. For more information, visit www.adamshaycpa.com.

IRS IP PIN (Identity Protection Pins)

What is an IP PIN?

IP PINs are designed to prevent an individual from filing a fraudulent tax return by using someone else’s social security number. It is a six digit number that is entered with the tax return and is required for filing for eligible individuals. If the IP PIN is not entered and the return is electronically filed, it will be automatically rejected by the IRS. Paper filed returns are manually checked for this IP PIN and will be returned if the submission does not include it.

Why Would I Receive an IP PIN?

• Individuals that were a victim of identity theft and the IRS has resolved the case.
• Individuals that receive an IRS letter inviting you to “opt-in” to get an IP PIN.
• Individuals that file a federal tax return last year as a resident of Florida, Georgia, or the District of Columbia. These individuals would have to apply for an IP PIN and would not receive a letter automatically.

IP PINs letter were mailed this week for 2015 individual tax returns. We were notified that these IRS letters included an error that says the IP PINs are for the 2014 tax return when in fact, they are to be used for the 2015 tax returns. The most important thing to do is to provide these to your tax professional when received. Please contact us with any questions you have regarding your IP PIN.

If you are using TurboTax to file your state tax returns, you may not be the only one. Late last week TurboTax stopped electronically filing of all state returns. This came after states reported that there were individuals trying to obtain refunds through their system fraudulently using TurboTax software. The issues were raised when multiple individuals were filing returns under the same Social Security numbers. The source of the problem has so far been reported as not a TurboTax internal security breach. A spokeswoman at Intuit is crediting the issue to weak user passwords that have been hacked when the username or email was known.

                Utah, Alabama, Minnesota, and Georgia were the states that issued press releases about the tax fraud. As of last Friday, Minnesota had stopped accepting returns by individuals using TurboTax all together. North Carolina has not released any issues with the system yet and we hope it stays that way. TurboTax may have been targeted for this fraud since state returns can be electronically filed without the Federal return being processed. The use of the Social Security number twice on the Federal side typically catches the fraud and sends up a red flag for states. The prevalence of the fraud can be perpetuated by the ability to file state tax returns across multiple states under one Social Security number. Cases of this theft have shown that the returns often times mimicked 2013 filed tax returns to avoid suspicion.

                This incident is yet one more reason to keep your information secure and to file timely.  Like we mentioned in a previous blog post we utilize our custom Sharefile site here: www.adamshaycpa.sharefile.com to protect tax return data for our clients. If you are using TurboTax we recommend a reset of your passwords during this tax season to help avoid this happening to you. If you think you may have been a victim of tax fraud there are avenues for recourse as well.

               If you are using TurboTax to file your state tax returns, you may not be the only one. Late last week TurboTax stopped electronically filing of all state returns. This came after states reported that there were individuals trying to obtain refunds through their system fraudulently using TurboTax software. The issues were raised when multiple individuals were filing returns under the same Social Security numbers. The source of the problem has so far been reported as not a TurboTax internal security breach. A spokeswoman at Intuit is crediting the issue to weak user passwords that have been hacked when the username or email was known.

                Utah, Alabama, Minnesota, and Georgia were the states that issued press releases about the tax fraud. As of last Friday, Minnesota had stopped accepting returns by individuals using TurboTax all together. North Carolina has not released any issues with the system yet and we hope it stays that way. TurboTax may have been targeted for this fraud since state returns can be electronically filed without the Federal return being processed. The use of the Social Security number twice on the Federal side typically catches the fraud and sends up a red flag for states. The prevalence of the fraud can be perpetuated by the ability to file state tax returns across multiple states under one Social Security number. Cases of this theft have shown that the returns often times mimicked 2013 filed tax returns to avoid suspicion.

                This incident is yet one more reason to keep your information secure and to file timely.  Like we mentioned in a previous blog post we utilize our custom Sharefile site here: www.adamshaycpa.sharefile.com to protect tax return data for our clients. If you are using TurboTax we recommend a reset of your passwords during this tax season to help avoid this happening to you. If you think you may have been a victim of tax fraud there are avenues for recourse as well.

It is a rarity that citizens vote in favor of tax increases, but that is exactly what happened yesterday in New Hanover County. There was an overwhelming majority in favor of the Wilmington Transportation bond and New Hanover County school bond.

What does this mean for the county?

The Wilmington Transportation bond was approved for $44 million and the city will allocate other funds for a total of $55 million for the proposed projects. The areas planned for improvement are marked by large blue signs around the city. The funds allocated for the projects are broken down as follows:

–          $33 million in road improvements

–          $20 million in sidewalks, crosswalks, and trails to improve pedestrian access

–          $2 million in public transportation

The New Hanover County school bond was approved for $160 million. This bond’s 14 projects will address the county’s top concerns of safety, increase enrollment, and infrastructure. The projects will include a new elementary school, several replacement schools, and renovations to eight existing schools. There will also be safety and infrastructure improvements throughout the county.

What does this mean for taxes?

The Wilmington Transportation bond will increase the city’s property tax rate by 2 cents starting July 1, 2015 and lasting for twenty years. This means for every $100 worth of home value you will pay an additional 2 cents per year. Note that this is a city tax so citizens in New Hanover County not in the city limits will not be subject to this tax.

The New Hanover County school bond will increase the city’s property tax rate by 3 cents and lasting for twenty years. This means for every $100 worth of home value you will pay an additional 3 cents per year. This is a county wide tax.

Property taxes are deductible on your individual income tax return if deductions are itemized. This means that not only will those taxes pay to improve the county, but can provide income tax benefit as well!

FAFSA (Free Application for Federal Student Aid) is the form parents need to complete to determine if their high school senior is eligible for college financial aid in the form of grants, loans, and work-study opportunities. 

FAFSAs can be submitted to colleges on or after January 1st. You should complete the form as soon after January 1st as you can. Some states, including North Carolina, award a portion of available aid on a first come, first served basis.

You do not have to wait to submit the FAFSA until you file your taxes. File the form electronically, and check the “will file” box on the form. A benefit to filing electronically is that students may submit the form to up to 10 schools; the paper application allows for only 4 submissions.

  • The FAFSA is available at fafsa.ed.gov. You can get the Title IV school codes for all the schools you plan to list on the FAFSA at this site.
  • To file electronically, get a pin number for one parent and the student. Obtain the pin number from pin.edu.gov.
  • Get the following documents ready: federal tax return, social security numbers for parents and student, student driver’s license number, bank statements, investment statements, mortgage information, and untaxed income statements (1099 income, untaxed social security income, child support received, veteran benefits). Make copies of all documents.
  • Be sure to answer all questions on the FAFSA form.  If a question does not apply, use a zero or N/A.
  • Keep a copy of everything you file. Make a record of the date you send information. If you mail a form, use mail delivery confirmation.
  • If there are special circumstances that will affect your ability to pay your child’s tuition (supporting an aging parent, 2013 income reflects a one-time bonus or withdrawal from a retirement account or 401K, unusually high medical bills, upcoming reduction in work hours, etc.), you should make the college aware through a special circumstance notice.

Don’t assume that your child will not qualify for assistance. College is expensive, and many families are eligible for help with tuition.

If you are thinking about purchasing an appliance in NC, this weekend could be a good one to do so.  November 2nd-4th is North Carolina's Energy Star sales tax holiday.   Some items that qualify are washers, refrigerators and freezers, air conditioners, heat pumps, ceiling fans, dehumidifiers and programmable thermostats.  You need to pay for and request immediate delivery of the product.  The NC state sales tax rates can be anywhere from 6.75% to 7.25%.  So on a $500 appliance you could save around $35.  It may not seem like a lot, but these things add up and if you are in the market to buy one this weekend would be the time to do so.