My CPA Tips


  Many are waking up to a new reality: The shrinking tax refund. News reports, articles and internet postings are bemoaning lower refunds after filing taxes this year. As you may know this is the result of a number of factors with the new tax laws. Although the standard deduction is higher for singles and married filing jointly, there are two other factors which are responsible for smaller refunds. Standard deductions are larger. Your standard deduction increases to $12,000 if you file as single. For married filing jointly, your standard deduction is $24,000. That’s good news for some. However, if you do not have itemized deductions exceeding those amounts, you will not be able to use them. The new laws have also implemented a number of changes to the limits on deductions. A couple of these are mortgage interest and state and local tax (SALT) deductions. Residential mortgage interest is limited to interest paid on a $750,000 mortgage instead of the deduction on a $1 million mortgage in 2017. The new laws also cap SALT deductions at $10,000 so you may only deduct up to that amount. A third factor is the changes to the tax brackets themselves. The amount you set to be withheld from your paychecks may not be sufficient if your income changes the tax bracket you are in. If you or your CPA did not make appropriate changes, you might find that you did not have enough withheld from your pay last year. In this case, you may see a smaller refund or may even have to pay for the deficit. These significant changes in the tax law will affect many Americans as they prepare taxes and file for refunds. For proper tax preparation, work with your CPA in 2019 to avoid these pitfalls. Les Merritt, CPA and CFP (Certified Financial Planner) is ready to lend assistance. He has helped families and companies for over 30 years with tax preparation and planning. Contact Les at (919) 269-8553 to assist you with filing this year. Begin making preparations the current tax year so that you won’t have to face a shrinking tax refund in the future.  

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deductionsWill you take standard or itemized deductions for the 2018 tax year? You can also deduct the interest you pay on mortgage loan from your taxes but the limits have changed. For couples filing jointly you can deduct interest up to $750,000 instead of the allowable $1 million in 2017. If you are married taxpayers filing separately, the deductible amount is $375,000, instead of the  previous $500,000. It used to be that you needed to spend 10% of your adjusted gross income on qualifying medical expenses. Now you need only spend 7.5%. That means you will be able to deduct more of your medical bills if itemize. The new tax law also lowers capital gains taxes for most taxpayers. The decrease is a result of a shift in how capital gains income limits line up to the new tax brackets installed this year. If you benefit from capital gains, you can keep more of your investment for yourself. However, if you’re used to itemizing, this year might be difficult. What it means is if you file as single, your itemized deductions will have to exceed the standard deduction of $12,000. If not, you will get the standardized deduction. For married filing jointly, your deductions will need to exceed a standard deduction of $24,000. Here’s the bottom line: To itemize, your itemized deductions have to exceed your standard deduction. So what is the best route for filing this year? Use a tax preparer. Les Merritt, CPA and CFP (Certified Financial Planner) makes it his business to know about the new laws and how they will affect his clients. With the wide-sweeping changes this year, your accountant will need to investigate both personal and business tax changes. Not only your individual taxes but those of your corporation if you own a business and pay corporate taxes may be different. He or she may have to figure your taxes with itemized deductions and with standard deductions. Les Merritt has been helping individuals, families and businesses with their taxes for over three decades. He and his staff have been helping clients to take all allowable deductions and reduce their tax burdens during this time. Les looks forward to serving you. Call at (919) 269-8553 to set an appointment Take care of last year’s tax return and those in the future. Planning for next year’s taxes can begin now so that even though you may not have made the moves in 2018, you can begin making the changes to reduce your taxes next year. Call today to take care of your tax filing this year and to secure your future.  

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No Light ReadingThe new tax law is over 1,000 pages and has significant impact on your filing for 2018 and beyond. Are you ready for some light reading? Changes in 2018 tax law could impact your investments and savings plans. Here are a few of the modifications made to the tax code: retirement savings, IRAs and Roth IRA contributions and estate taxes. The new code revises limits for retirement savings  and may have an effect on your planning. Savings limits for IRAs are different. The government has also modified contribution levels for Roth IRAs. The code made changes to estate taxes for the tax year as well. These are just a few of the differences between 2018 tax law and those from previous years. All these changes may affect how you invest for the future and that means you may need to consult with your financial planner unless you’d like to do a little light reading. Since all these changes could impact your investments and savings plans, you might need meetings with both your accountant and your financial planner. That is unless they are one and the same person. Les Merritt is the only professional who is both a CPA and CFP (Certified Financial Planner) in Zebulon. He can assist with investment and overall financial planning and prepare your taxes keeping in mind how each influences the other. These modifications to the code will continue to influence how you invest in the future. Why not work with Les who has been helping families and businesses with taxes for over three decades? Call the Les Merritt office at (919) 269-8553 to have your taxes prepared or to begin planning for 2019 so that your investments and tax liability are aligned. Using the same CPA and CFP has never been more important and you can begin or continue working with Les Merritt to get this professional advantage. Leave the heavy lifting of understanding the new tax code to a professional. You can spend your time instead reading an entertaining novel or watching a great movie.    

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A prosperous new year begins with plans and goals. In the midst of this holiday season is a good time to take stock. After looking back at 2018 consider what you would like to spend your time working on in the new year? Are you planning that marvelous vacation, buying a new car or home, or spending more time with family and friends? Setting the goal is the first step. People are more likely to achieve their dreams when they can visualize what they want to do.

With the end in mind, outline the steps to get there. You might want to think about the final step and work backward. Or you might plan forward. In any case, seeing the path to the goal is essential. Remembering what you want to do daily also helps. The third ingredient in successfully achieving your objective is to measure your progress.

Another important consideration is determining the resources you will need. Do you have to save money? Do you need to establish time to enjoy the objective? Do you have to organize an event and get others to make time as well? Arriving at your goal may require that you answer and act on these types of questions.

The staff at Les Merritt, CFP, CPA hope that you will realize your dreams. We are here to help you with financial and tax planning to aid you on your journey to a prosperous new year. Call us today at (919) 269-8553 to set an appointment to prepare for a bright new year. We have been assisting businesses, individuals and families for over three decades. Make your preparations soon so that a year from now you can look back and see how you have achieved your goals. Be safe and secure going into 2019.

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