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Thursday, June 21, 2018

It's Paycheck Checkup Time!



The Tax Cuts and Jobs Act has changed the way that your income tax is calculated. The IRS encourages taxpayers to perform a quick “paycheck checkup” by using the Withholding Calculator to check if they have the right amount of withholding for their personal situation.  The Calculator helps you identify your tax withholding to make sure you have the right amount of tax withheld from your paycheck at work.  Mid-year is the perfect time for a checkup because you still have time to make a change that will give you the result you want at tax time.

There are several reasons to check your withholding:
  • Checking your withholding can help protect against having too little tax withheld and facing an unexpected tax bill or penalty at tax time next year. 
  • At the same time, with the average refund topping $2,800, you may prefer to have less tax withheld up front and receive more in your paychecks. 
If you are an employee, the Withholding Calculator helps you determine whether you need to give your employer a new Form W-4, Employee's Withholding Allowance Certificate. You can use your results from the Calculator to help fill out the form and adjust your income tax withholding.

Plan Ahead: Tips For Using This Program

The Calculator will ask you to estimate values of your 2018 income, the number of children you will claim for the Child Tax Credit and Earned Income Tax Credit, and other items that will affect your 2018 taxes. This process will take a few minutes.
  • Gather your most recent pay stubs.
  • Have your most recent income tax return handy; a copy of your completed Form 1040 will help you estimate your 2018 income and other characteristics and speed the process. 
  • Keep in mind that the Calculator’s results will only be as accurate as the information you provide.  If your circumstances change during the year, come back to this Calculator to make sure that your withholding is still correct.
  • The Withholding Calculator does not ask you to provide sensitive personally-identifiable information like your name, Social Security number, address or bank account numbers. The IRS does not save or record the information you enter on the Calculator.
IMPORTANT NOTE: This Withholding Calculator works for most taxpayers. People with more complex tax situations should use the instructions in Publication 505, Tax Withholding and Estimated Tax. This includes taxpayers who owe self-employment tax, alternative minimum tax, the tax on unearned income of dependents or certain other taxes, and people with long-term capital gains or qualified dividends.

It's also important to check your state withholding separately, since the Tax Cuts & Jobs Act has not changed the Montana withholding tables.  

Thursday, June 14, 2018

Flag Day 2018

Although the wind didn't cooperate for our photo, we're proudly flying the stars and stripes today for Flag Day!
Did you know?.... 
Flag Day is celebrated on June 14th because it commemorates the day in 1777 when the Second Continental Congress signed a resolution that finalized the flag's design.

Monday, June 11, 2018

Continue Using your 2017 Form W-4 for Montana Withholding

Although the Tax Cuts & Jobs Act has significantly changed the federal tax code, the Montana Department of Revenue has not announced any major reform.  Many employers have recently requested employees to complete the new 2018 W-4 but if you've made changes in your withholding allowances to reflect federal tax changes, it could have an undesirable impact on your state withholding. The below is information from the MT Dept of Revenue website with advice to employees and employers for handling MT income tax withholding.  

We recommend that employees continue to use the number of allowances calculated on their 2017 (or older) Form W-4 for Montana withholding. A newly hired employee should also use the 2017 federal Form W-4 to calculate the number of allowances for Montana.

The IRS recently released a new federal Form W-4, Employee’s Withholding Allowance Certificate, for 2018 to reflect the recent federal tax reform provisions. As a result, employees may revise the number of federal allowances on the new Form W-4, which will reduce the tax withheld from their wages for federal purposes. Montana requests that employees keep using the 2017 federal Form W-4 because the recent federal tax law changes have no impact on the number of exemptions or the amount of standard deductions a taxpayer may claim on the Montana return. Therefore, there is no related reason to change the number of allowances for Montana withholding purposes.

When calculating their withholding allowances, an employee should further consider the following:

  • Montana does not allow the federal child tax credit nor the exemption from withholding.
  • If more than 10 allowances are reported on an employee’s federal Form W-4, the employer must continue to submit the form to the Department of Revenue for review. If the department determines it is not correct number of allowances for state withholding purposes, we will contact the employee and employer with the revised number. If necessary, employees can then contact the department to justify an increased amount of allowances.
We recommend consulting with a tax preparer to determine if your state taxes are impacted by any of the federal tax changes.

Wednesday, May 30, 2018

Summer Hours

Summer is here!
We are now operating on summer hours.
Our office will be closed on Fridays during the months of June, July & August. 
Wishing you all a wonderful summer!

Wednesday, May 23, 2018

Congratulations Class of 2018!


CONGRATULATIONS CLASS OF 2018
from Gardner & Billing CPAs! 
And Happy Last Week of School 
to students, teachers and faculty! 
Wishing you all a wonderful summer. 

Tuesday, May 15, 2018

Tax Reform and What it Means for Your Personal Taxes


 

On December 22, 2017, President Trump signed the first major tax reform in 31 years into law. The Tax Cuts and Jobs Act makes many changes to the tax code and every taxpayer is impacted. 

A highlight of some of the changes are as follows: 

  • Tax rates: Tax rates are reduced. The top rate is reduced from 39.6% to 37%. Lower rates are also reduced. 
  • Exemptions and the child tax credit: The deduction for personal exemptions is eliminated. An expanded child tax credit will help make up for the loss of personal exemptions for some families. The credit is increased to $2,000 (from $1,000) for qualifying children under 17. For children 17 and older and for other dependents, the credit is $500.  
  • Standard deduction: The new tax reform law doubles the standard deduction. The higher standard deduction ($12,000 for singles, $18,000 for heads of household, and $24,000 for married filing joint) means that fewer taxpayers will benefit from itemizing deductions. 
  • Itemized deductions: Itemized deductions for all state and local taxes, including property taxes, are capped at $10,000. The limit on mortgage debt for purposes of the mortgage interest deduction is reduced from $1,000,000 to $750,000 for loans made after December 15, 2017. Loans made before December 15, 2017 are grandfathered at the $1,000,000 debt limit. The interest on home equity borrowing is no longer deductible. The threshold for medical expense deductions is lowered to 7.5% of adjusted gross income (from 10%) for tax years 2017 and 2018. Miscellaneous itemized deductions subject to the 2% of AGI limitation are not allowed. Miscellaneous itemized deductions lost because of the new law include employee business expenses, investment adviser fees, union dues, and tax preparation fees. Personal casualty losses are not allowed unless the losses were suffered in a federally declared disaster area. 
  • Alimony: The new tax reform law eliminates the alimony deduction for agreements signed after December 31, 2018. Alimony income is not taxable for agreements signed after December 31. 2018. There is no change to the law for agreements signed before January 1, 2019. 
  • Moving expenses: The new tax reform law eliminates the moving expense deduction and makes employer reimbursement of moving expenses taxable to the employee beginning in 2018. 
  • AMT: The new tax reform law temporarily increases the alternative minimum tax (AMT) exemption for tax years 2018 through 2025. The increase in the exemption, as well as the elimination of major tax preferences (including exemptions, state taxes above $10,000 and miscellaneous itemized deductions), means that fewer people will be subject to AMT under the new law. 
  • Roth IRA conversions: The new tax reform law repeals the special rule permitting re-characterization of Roth IRA conversions. A conversion of a traditional IRA to a Roth IRA may still be advisable, but once the conversion is completed, it can’t be undone. 
These are just a few of the changes included in the Tax Cuts and Jobs Act. Your 2018 taxes will be affected; that’s guaranteed by the scope of the changes, but the degree of impact depends on your personal situation. 
Questions we can answer for you. 
  • Will the new tax reform law help me or hurt me? 
  • Is my withholding enough so that I won’t have any surprises next April 15th? 
  • Is there anything I can do now that will make my taxes less under the new tax reform law?
Gardner & Billing CPAs, PLLC will be providing articles throughout the summer that discuss the new Tax Act and the resulting changes that may have an impact on you and your family. We encourage you to please call us at 406-436-2583 for answers and planning suggestions.

Wednesday, May 9, 2018

Springtime is here



It seems like everyone is outside enjoying the springtime, so it might be hard to think about book work, but this is actually the perfect time of year to get your 2017 adjusting entries into QuickBooks or get some business consulting done. We can schedule on-site consulting to review your business cash flow management, office processes, business plan and what it will take to get you on track for 2018 to achieve your goals.