3 traditional midyear tax planning strategies that hold up post-TCJA

With its many changes to individual tax rates, brackets and breaks, the Tax Cuts and Jobs Act (TCJA) means taxpayers need to revisit their tax planning strategies. Certain strategies that were once tried-and-true will no longer save or defer tax. But there are some that will hold up for many taxpayers. And they’ll be more effective if you begin implementing them this summer, rather than waiting until year end. Take a look at these three ideas, and contact us to discuss what midyear strategies make sense for you.

1. Look at your bracket

Under the TCJA, the top income tax rate is now 37 percent (down from 39.6 percent) for taxpayers with taxable income over $500,000 (single and head-of-household filers) or $600,000 (married couples filing jointly). These thresholds are higher than for the top rate in 2017 ($418,400, $444,550 and $470,700, respectively). So the top rate might be less of a concern.

However, singles and heads of households in the middle and upper brackets could be pushed into a higher tax bracket much more quickly this year. For example, for 2017 the threshold for the 33 percent tax bracket was $191,650 for singles and $212,500 for heads of households. For 2018, the rate for this bracket has been reduced slightly to 32 percent — but the threshold for the bracket is now only $157,500 for both singles and heads of households.

So a lot more of these filers could find themselves in this bracket. (Fortunately for joint filers, their threshold for this bracket has increased from $233,350 to $315,000.)

If you expect this year’s income to be near the threshold for a higher bracket, consider strategies for reducing your taxable income and staying out of the next bracket. For example, you could take steps to accelerate deductible expenses.

But carefully consider the changes the TCJA has made to deductions. For example, you might no longer benefit from itemizing because of the nearly doubled standard deduction and the reduction or elimination of certain itemized deductions. For 2018, the standard deduction is $12,000 for singles, $18,000 for heads of households and $24,000 for joint filers.

2. Incur medical expenses

One itemized deduction the TCJA has retained and — temporarily — enhanced is the medical expense deduction. If you expect to benefit from itemizing on your 2018 return, take a look at whether you can accelerate deductible medical expenses into this year.

You can deduct only expenses that exceed a floor based on your adjusted gross income (AGI). Under the TCJA, the floor has dropped from 10 percent of AGI to 7.5 percent. But it’s scheduled to return to 10 percent for 2019 and beyond.

Deductible expenses may include:

  • Health insurance premiums,
  • Long-term care insurance premiums,
  • Medical and dental services and prescription drugs, and
  • Mileage driven for health care purposes.

You may be able to control the timing of some of these expenses so you can bunch them into 2018 and exceed the floor while it’s only 7.5 percent.

3. Review your investments

The TCJA didn’t make changes to the long-term capital gains rate, so the top rate remains at 20 percent. However, that rate now kicks in before the top ordinary-income tax rate. For 2018, the 20 percent rate applies to taxpayers with taxable income exceeding $425,800 (singles), $452,400 (heads of households), or $479,000 (joint filers).

If you’ve realized, or expect to realize, significant capital gains, consider selling some depreciated investments to generate losses you can use to offset those gains. It may be possible to repurchase those investments, so long as you wait at least 31 days to avoid the “wash sale” rule.

You also may need to plan for the 3.8 percent net investment income tax (NIIT). It can affect taxpayers with modified AGI (MAGI) over $200,000 for singles and heads of households, $250,000 for joint filers. You may be able to lower your tax liability by reducing your MAGI, reducing net investment income or both.

© 2018

Recent Articles:

Follow Antares CPAs:

Thank you for registering!

You will receive an email confirmation soon, and we look forward to seeing you at the Antares Wealth Symposium.

Make your room reservation now.

Use the link below to get a special room rate at the gorgeous Hotel Contessa where our symposium is being held.

Save my place!

Complete this short form to reserve your place at the free Antares Wealth Symposium. Watch for your confirmation email and we look forward to seeing you in San Antonio.

Contact Info
Guest Info

To help with meal planning, please indicate how many from your group will be attending each event.

Monday Dinner

Tuesday Breakfast

Tuesday Lunch

Dietary Restrictions
Other Accommodations
Contact Info
Guest Info

To help with meal planning, please indicate how many from your group will be attending each event.

Monday Dinner

Tuesday Breakfast

Tuesday Lunch

Dietary Restrictions
Other Accommodations

Succession & Transition Strategies

Creating a successful succession plan is about protecting the future of a business and/or brand and ensuring there is a strategy in place to ensure your business continues to thrive.

After years of investing time, money and other resources, it’s imperative to prepare for this next stage in business and life. Poor planning can increase risks for stakeholders and tarnish legacies. Let’s make sure the next generation is well-equipped and ready to take your life’s work and family legacy to an even greater level of success.

Each situation is unique because the needs of each one involved are unique. We carefully review each opportunity to determine how best to structure a transition while meeting your goals, complying with any brand licensing polices and minimizing the tax implications of the transfer.

  • Next generation succession planning
  • Retirement planning
  • Wealth management

Let's get started.

Call us at 770.785.7855 Or email hello@antaresgroupcpas.com

Technology Services

Antares Group’s technology team provides convenient hardware and software support, along with comprehensive cloud accounting services with 24/7 access to up-to-date financial information exactly the way you want it, on any connected device, with a customizable dashboard interface. We use best-in class cloud accounting platforms and software including Sage Intacct, Bill.com and robot process automation (RPA) with integration capabilities with some of the leading point-of-sale, payroll, and business operations management software programs.

Cloud accounting is just the beginning; Antares Group’s experienced technology team also performs system evaluations and makes recommendations for products and services that will help your business run more efficiently, as well as protecting your information and infrastructure with robust security options. Using the right technology for automation will simplify your life and keep your valuable data safe..

  • Technology and security optimization
  • Complete cloud accounting services
  • Computer troubleshooting assistance with remote and onsite repair

Let's get started.

Call us at 770.785.7855 Or email hello@antaresgroupcpas.com

Business Planning & Valuation

An accurate understanding of your company’s current value and financial viability is vital for achieving business success and the launch pad to boundless possibilities in the years to come. Realistic valuations are essential for long-term strategic plans, business successions and expansions, gift and estate planning, and a lucrative retirement package. Planning for where you want to go in the future is what our business and tax advisors do best. Whatever your goals, we are here to provide you with the right plan and insightful guidance to achieve it.

  • Trend reporting and analysis and business valuation
  • General business and start-up consulting
  • Major reinvestment planning
  • Cash flow projections

Let's get started.

Call us at 770.785.7855 Or email hello@antaresgroupcpas.com

Back Office Solutions

In such a fast-moving business environment, business owners need every advantage to succeed. Improving efficiency should be an ongoing part of your strategy for financial success, empowering you to make continuous improvements.

Whether your business is a single location seeking to grow effectively and sustainably, an established franchise brand adding new locations, or something in between, Antares Group provides a suite of back office services and the financial expertise to help business owners and managers achieve their operational and financial goals. In the process of supporting your essential back office operations with practical solutions, we analyze the function and effectiveness, looking for inefficiencies and potential liabilities, offering valuable insights for owners and managers.

  • Daily deposit verification and online banking monitoring
  • Process invoices and code general ledger accounts
  • Process vendor payments and file 1099s
  • Prepare and file sales and use tax returns
  • Reconcile bank, credit card and cashless sales accounts

Let's get started.

Call us at 770.785.7855 Or email hello@antaresgroupcpas.com

Tax Advisory

Minimizing your tax burden is a year-round strategy; planning for and preparing complex business and individual tax returns is where Antares Group excels. Beyond simply helping you fulfill basic tax obligations, you can rely on our tax advisory team to keep you informed of ever-changing regulations and keep you in compliance. We conduct regular reviews to make sure all methods of reducing your tax liabilities are being used. We routinely assess your personal income tax situation and cash flow to guard against the unexpected. This ongoing strategic analysis empowers you to maximize tax savings and capitalize on new opportunities.

In addition, we provide advisory services for new business startups, acquisitions, and dispositions. Through careful analysis, we help clients determine the best structure and make the process as seamless as possible.

  • Business and individual year-end tax returns
  • Personal property, gift, and trust income tax returns
  • Fixed asset setup and maintenance
  • Annual tax planning and preparation

Let's get started.

Call us at 770.785.7855 Or email hello@antaresgroupcpas.com

Cloud Accounting

Whether you run a small closely held business or a large franchise operation, maintaining a firm grasp of accounting and bookkeeping can be challenging. Between managing staff and overseeing daily operations, there is not enough time to dig into the books and make sense of the financials. You need to know the facts and the implications. – having precise, up-to-date information at hand means you always know your financial position so you can make informed decisions that keep your business moving forward.

The financial experts at Antares can create a custom menu of accounting and tax services perfectly catered to your business needs, including accurate and timely financial statements and reports, so you are always prepared to respond quickly to changing and challenging circumstances. Along the way, we provide clear feedback and financial guidance to help you predict trends and recognize issues, then make the necessary adjustments to sustain cash flow throughout the year.

  • Timely preparation of financial statements based on your particular needs
  • Complete preparation of sales, payroll, inventory, accrual, and prepaid journal entries
  • Meticulous monthly bank and credit card reconciliations

Let's get started.

Call us at 770.785.7855 Or email hello@antaresgroupcpas.com