Key Takeaways You Shouldn’t Miss from MSATP’s Maryland Jobs and Tax Act Video

It’s our favorite time of the week once again—the MSATP team just dropped our third Facebook Livestream episode featuring an in-depth analysis of the latest happenings in the tax and financial world!

MSATP’s latest video features a dynamic duo of industry experts. First, Phyllis Burlage returns to break down a busy 2018 legislative schedule that could have a major impact for tax professionals. Then, Jerry Lotz, from Cost Segregation Services Incorporated (CSSI), introduces the concept of cost segregation—a method of re-classifying components and improvements of commercial buildings from real property to personal property to reduce taxable income and ramp up cash flow. Here’s a closer look at what MSATP’s third episode covered—make sure to watch the video to get the full experience!

LEGISLATIVE UPDATE

It’s been a busy start to 2018—there were 3,127 bills introduced during the Maryland legislative session spanning from January 10^th to April 9^th. Here are some key takeaways from all the recent activity:

TAX RELIEF:

It looks like the majority of MSATP’s clients will be paying higher Maryland taxes in the coming year. The Maryland legislature still needs to gauge exactly how much more revenue will be generated by the tax changes before they make further changes. Based on the available information, here’s what to expect for the tax year:

• Anyone can elect to use the Standard Deduction
• You must itemize on the Federal return to itemize on the Maryland return
• The Standard deduction has been increased on the Individual $250 to a maximum of $2,250 AND Head of Household and Joint $500 to a max of $4,500. That’s an estimated $40 tax break for 58% of taxpayers!

WINNING TAXPAYERS:

Several classifications of Maryland taxpayers are getting substantial tax breaks thanks to the new legislation coming down the pipeline—including small businesses and investors. Here’s a quick break-down of who stands to benefit:

• The subtraction for Military Retirement Income is $5,000 for retirees under 55 and $10,000 for retirees over 55
• Corrections officers may subtract up to $15,000 of their retirement income
• The Earned Income Credit has been expanded by eliminating the 25-year-old minimum age
• Teachers will receive a $250 subtraction for unreimbursed school expenses
• Small Business Credit for businesses with less than 15 employees who give paid sick and safe family leave to low paid employees receive a $500 credit
• Investors in cyber security companies now qualify for a tax credit that previously was only available to the company
• Individuals whose statewide original cost is less than $2,500 are exempt from personal property taxes
• For estate taxes, the Maryland Unified Credit was increased to $5,000,000
• Exemption to register as a tax preparer will not apply to employees of exempt tax preparation practitioners if the employee signs the return as the preparer
• General contractors may now be held responsible for wage violations of a subcontractor

HEALTH INSURANCE:

On last week’s episode, we covered the HSA conundrum when it came to male reproductive coverage and the attempted legislative “fix” for the issue. The HSA “fix” for coverage of vasectomies passed and was approved by the Governor. Another “fix”—this time for Obamacare to prevent skyrocketing premiums also saw some movement. Maryland will take the $380 million federal tax break away from insurance companies and use the money to subsidize the catastrophic claims by those with insurance thru the Maryland Marketplace.

COST SEGREGATION—STAY COMPLIANT, SAVE MONEY

The rules have changed—there’s now a way to keep your clients compliant and get more loyal customers. Sound too good to be true? With cost segregation, you can do both! Cost segregation is a method of re-classifying components and improvements of your commercial building from real property to personal property. This process allows the assets to be depreciated on five, seven, or fifteen-year schedule instead of the traditional 27.5 or 39-year depreciation schedule of real property. This means your clients’ current taxable income will be substantially reduced while their cash flow increases.

The experienced professionals at Cost Segregations Services Incorporated will conduct a complimentary property analysis and review the potential savings with you and your client. The study will be fully completed in a short 4-6 weeks and will keep your clients happy and compliant! Who exactly qualifies and benefits from this game-changing tax approach? A wide variety of businesses and individuals are eligible for major tax savings, including owners and leaseholders of residential rental, multi-family and commercial properties. Contact Cost Segregation Services Incorporated today to learn how you can save your clients a substantial amount of their hard-earned money!

Be sure to stay tuned for this week’s MSATP Facebook Live stream on Thursday, April 19^th at 9 AM to hear our Board President, William M. Feehley, wrap-up the 2017 tax season! Not a member of our private MSATP Members Facebook Group yet? Click HERE to join!