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January 4, 2019
New Mexico’s Legal & Financial Weekly
Vol. 9.99 No. 1
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Navigating Through The NewBy Beverly TaxCuster Laws
he holidays are over. You’ve taken down the decorations, packed up the tree and lights, and are ready to usher in a brand, new year. When the clock struck midnight Dec. 31, it also signaled the end of the tax year. You may be aware that there have been changes to the tax law. But what are those changes, particularly if your auld lang syne included charitable giving? Under the new Tax Cuts and Jobs Act, individuals who have itemized in the past to receive the tax benefit of donating to their church, synagogue or other charitable organization, must now meet the $12,000 annual minimum to qualify ($24,500 for married joint filers). However, there are ways around this change.
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Additionally, Bell advises speaking with a tax professional when thinking about selling investment property or converting your home “One could bunch two- or three-years’ worth of donations to claim to a rental property. itemized deductions in one year and then claim the standard deducWith these major new changes in the tax law, there is good news for tion in alternating years,” said Albuquerque CPA Jon Bell. most taxpayers. “Tax rates are lower. Personal exemptions have been For example, if your typical yearly giving to the American Heart eliminated. The new law eliminates the personal exemption, which Association is $7,500, you would have to wait until next year to claim was scheduled to be $4,050 per exemption in 2018. The standard the tax benefit, given your donation for tax years 2018-19 combined deductions are nearly doubled for everyone. Many taxpayers will see a reduction in their taxes in 2018.” totals the new minimum. “For those age 70 ½ and above, consider making qualified charitable Bell, who has been helping individuals and businesses with proacdistributions from your IRA directly to charities,” said Bell, who is tive tax planning advice for more than 15 years, urges folks to seek also a certified tax coach. “The contributions count toward your re- the advice of a professional when attempting to discern the new tax quired minimum distribution and isn’t included in your income. That changes. could help you qualify for tax breaks tied to your adjusted gross in- “The new tax law is complex, with implications that are different for everybody,” he said, adding that a seemingly inexpensive, online tax come, and reduce or eliminate taxes on Social Security benefits.” Still another option is to set up and transfer assets to a donor-advised program is no substitute for a skilled tax expert who can save you fund. “You can claim a deduction for the amount invested in the fund much more in taxes than your overall fees. “You could buy a bone and then make donations from the fund over subsequent years. While saw on eBay for $20 and do your own orthopedic surgery, but would you really want to do that?” in the fund, the assets can be invested and grow tax free.” Low-income taxpayers may access free tax preparation services What if 2018 brought with it some major life changes? Perhaps through the AARP Foundation’s Tax-Aide program. They offer peoyou’re contemplating retirement or scaling down into a smaller home ple 50 years old and older help filing their taxes with a trained volunteer. Additionally, the IRS offers taxpayers earning $65,000 or less or condo? “Seek professional advice when major changes happen in your life,” access to free software to prepare their own taxes. More information says Bell. “For those retiring soon or are in retirement, you need to can be found on their websites. consider very carefully when to start your Social Security benefits. For those over age 70 ½, consider looking at the most tax-efficient With whichever option you choose, now is the time to get a jump way to take required minimum distributions. This could include a on tax season, especially if you tend to be the sort who puts the “pro” in procrastination. strategy of converting retirement assets to Roth IRAs.”
Holiday Gift Ideas For The Hardest-Working People On Your List A new year, whether the one on the calendar or a more personal milestone, is a good time to give your health and well-being a new start, too. Here are three hints on how: 1. Be active—but don’t set too high a goal. Just walking for 30 minutes a day, even in 10-minute increments, can make a difference. 2. Eat right. Go for more fruits and vegetables; fewer sugary drinks, red meats and high-fat, processed foods. 3. Reduce indoor pollution. Get your HVAC system cleaned by a NADCA professional. In most homes, people generate a great deal of
contaminants and air pollutants, such as dander, dust and chemicals. These are pulled into the HVAC system and build up in the ductwork. NADCA sets the industry standard for HVAC system cleaning and its members must have at least one certified Air Systems Cleaning Specialist (ASCS) on staff, comply with a Code of Ethics and acquire continuing education credits. Learn More For further facts and tips and to find a nearby NADCA member, go to www.nadca.com. For a free Homeowner’s Guide to air duct cleaning, visit https://nadca.com/sites/default/files/docs/2017/ nadca_homeowners_guide_print_version.pdf. -(NAPSI)