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Talking taxes: your questions answered




The stock market and the economy are booming, yet high-income earners in California paid less tax in June than analysts expected.
The stock market and the economy are booming, yet high-income earners in California paid less tax in June than analysts expected.
Photo by 401(K) 2012 via Flickr Creative Commons

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Over the past few days, we've been covering a lot of different aspects of the massive tax reform that is set to take effect next year. We've covered the basics, we looked at how it will affect the Southern California economy specifically, whether the state's GOP lawmakers will face political backlash over their support for it, and how it will affect non-profits. 

But now, it's time to take on YOUR questions about the bill, which passed both houses of Congress Wednesday. Accountant Eva Rosenberg, also known as the Tax Mama, has some answers.

Gaming your taxes

Now that it's passed, the tax bill is heading over to President Trump's desk for his signature. In the meantime, Rosenberg had these tips on how to 'game your taxes' in the coming year.

Listener questions

How will student debt fare?

A tax question from listener Crystal Galbraith.
A tax question from listener Crystal Galbraith.
KPCC

 

"Well, Crystal, I have good news for you. There was a lot of talk back and forth between the house and the Senate about abolishing this. It ended up that they didn't touch this. So you can still deduct the student loan interest just as you did before."

Los Angeles is a city of freelancers, and the will be greatly affected by this new tax bill. It's something we've looked into before, but we received a couple questions from listeners that asked for more specifics.

A tax question from listener Diane Friedman.
A tax question from listener Diane Friedman.
KPCC

"All of these people who have unreimbursed business expenses will not be able to deduct any of them in the future."

And though this is not ideal for freelancers, Rosenberg lists out a couple of options:

"Renegotiate your contract with your employer to have them pay your expenses for you so you don't have unreimbursed business expenses or start your own business and negotiate a contract with your employer because businesses can still take most of these deductions."

A tax question from listener Wes Dawson.
A tax question from listener Wes Dawson.
KPCC

"Entertainment expenses are gone entirely, whether you are the employer or the employee, [EXCEPT] the meals and the travel expenses...if the employer pays them can be deducted and the meals are still reduced by 50 percent, but they can't be deducted by the employee. So we're back to renegotiating our contracts."

A tax question from listener Joslyn Lynch.
A tax question from listener Joslyn Lynch.
KPCC

The short answer to this big picture question? It's complicated.

"They've brought the corporate tax rate down so that could be a good thing. The alternative minimum tax on corporations was completely eliminated, but they didn't eliminate it on people, they just raised the limits on alternative minimum taxes...we've got all these pass-through entities that most people have like partnerships or 's corporations' and so we have these new little deductions that apply to some businesses and not some businesses. "

Some bonus info

Rosenberg left us with these last few important tidbits of info regarding Obamacare penalties. 

"Last year for the 2016 tax return, the IRS had this 'don't ask, don't tell' policy. So if you didn't answer the question, they didn't charge you the penalties."

This year, that's not the case.

"They eliminated the Obamacare penalties for not having insurance starting in 2019, not 2017 or 18. So, everyone filing their 2017 tax returns will still be facing some pretty nasty penalties if they didn't have insurance."

We'll continue closely covering the tax bill in the coming weeks. We're always open to questions, so if you have any, be sure to tweet us or leave us a message on Facebook.