The Internal Revenue Service is reminding farmers and fishers about the March 1 deadline to take advantage of special rules that can allow them to forgo making quarterly estimated tax payments.
Anyone with income from a farming or fishing business may be able to avoid making any estimated tax payments by filing their 2017 return and paying the entire tax due on or before March 1, 2018. This rule generally applies if farming or fishing income was at least two-thirds of the total gross income in either 2017 or the preceding tax year.
Reduction in Medical Expense Deduction Floor – Basically for 2017 and 2018, the itemized deduction for medical expenses for taxpayers over 65 before the close of the respective tax year stays at those expenses over 7.5% of AGI, instead of limiting to expenses that exceed 10% of AGI. For taxpayers younger than 65, the 10% limitation stays in effect.
Limit on Deductions for State and Local Taxes – For tax years beginning after 12/31/2017 and before 1/1/2026, the deduction for foreign real property taxes eliminated and the aggregate deduction for individual state and local real property taxes, state and local, and foreign, income, war profits, excess profits taxes, and general sales taxes is limited to $10,000.00 ($5,000.00 for MFS) for any tax year. This will only affect those that itemize deductions and have combined state and local (and foreign) taxes that exceed the threshold.
Bonus Depreciation – The new tax law increases the bonus depreciation to 100% for qualified property that is both acquired and placed in service after September 27, 2017, and it establishes a new phase-down schedule for years after 2022.
The Internal Revenue Service today issued the 2018 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.
Beginning on Jan. 1, 2018, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:
- 54.5 cents for every mile of business travel driven, up 1 cent from the rate for 2017.
- 18 cents per mile driven for medical or moving purposes, up 1 cent from the rate for 2017.
- 14 cents per mile driven in service of charitable organizations.
The business mileage rate and the medical and moving expense rates each increased 1 cent per mile from the rates for 2017. The charitable rate is set by statute and remains unchanged.
The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs.
Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.
A taxpayer may not use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS) or after claiming a Section 179 deduction for that vehicle.
Brent Howard was recently awarded the Legal Aid of Oklahoma Pro Bono Service Award for 2017. The award was given to two attorneys from the state of Oklahoma who serve their community.
Of the award, Mr. Howard said, “I am very thankful for the recognition. I have always been taught that when you are given much, much is expected of you. I like to think that I live by that principle and I always try to do my best to serve my community.”
In addition to his estate planning and tax law practice in Altus, Oklahoma, Mr. Howard also serves as the State Vice President of the Young Farmers and Ranchers, serves as Chairman of the Board of Regents for Western Oklahoma State College, serves his local church, Altus First United Methodist, is a member of the Altus Military Affairs Committee, and is active in the local Bar Association.
The full release from Legal Aid Services can be found here.
Genworth recently completed its Cost of Care Survey for 2017 and the results are in. From 2016 to 2017 the median rate of costs for nursing homes increased by 5.5%.
The monthly National Median Cost for Assisted Living is $3,750. Oklahoma’s Median Cost for Assisted Living is $3,033. (Alaska has the highest cost at $6,000/month.) I have found that rural areas such as ours tend to cost about $2,400 per month.
The monthly National Median Cost for Nursing Home care is $7,148 (semi-private room) and $8,121 (private room). Oklahoma’s Median Cost for Nursing Home Care is $4,471 (semi-private room) and $5,293 (private room). (Alaska has the highest cost at $24,333/month.) Our rural area tends to cost about $4,800 per month for private room.
Even though our state of Oklahoma is the most affordable state in the nation, when you calculate this for one year of care (12 months), you can see that average nursing home costs exceed $60,000.
As you look at your individual finances and think about your retirement, does your plan have the flexibility to cover these costs, should you require such care or assistance? Have you looked into alternative sources of funding such care, such as long-term care insurance or Medicaid planning? If you would like to discuss such options, then call your friendly southwest Oklahoma estate planning attorney, Brent Howard at 580-318-8829.