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Wednesday, January 9, 2019

Home Equity Loans and the TCJA


Home Equity Loans and the TCJA

Do you have a home equity loan?  Be ready at tax time when your CPA asks you how you used those loan proceeds.  Thanks to the new tax law known as the Tax Cuts and Jobs Act (TCJA), the deductibility of interest on home equity loans and lines of credit has changed.  

Prior to the TCJA, homeowners could deduct home equity interest on loans up to $100,000 regardless of what the funds were used for.  TCJA changed that and now only home equity interest on funds used to acquire, build or substantially improve your home is deductible.

So…if you took out a home equity loan or home equity line of credit and used the proceeds to finance college, a trip, or consolidate bills, you cannot deduct the interest paid on your 2018 income tax return.

You will need to give your CPA a breakdown of how you spent the loan proceeds if part of a home equity loan or line was used to acquire, build or substantially improve your home, and part was used for something else.

   
Honorine M. Campisi, CPA




Wednesday, December 26, 2018

Sales Tax on Advertising Services



Welcome to the latest installment of our blog “What are the rules for NYS Sales tax for my profession?”  In this blog we are highlighting another industry with a few of the broad guidelines to follow!  Our hope is to not only provide helpful information for the business owners, but the consumers as well!

This blog’s industry is Advertising Services.

An advertising service is a service that consists of the following:

  •  Consultation and development of advertising campaigns; and
  •  Placement of advertisements with the media

The sales of these services are not subject to sales tax.  In addition, materials created by an advertising agency that are conveyed to its customers digitally or in any other electronic format are also not subject to sales tax.

The area of advertising services that is subject to sales tax is as follows:

  • If an advertising agency sells layouts or art work, for example, to the customer before showing them to the media, the advertising agency is making a sale that is subject to sales tax.  Any other outright sales of tangible personal property by an advertising agency are subject to sales tax.
  • In addition, any purchases by an advertising agency for use to perform its services are purchases at retail that are subject to sales tax.

There are sales tax exemptions that may apply to the purchases made by advertising agencies.  The following purchases that if made by an advertising agency are exempt from sales tax:

  • ·         Producing television and radio commercials and advertisements; or
  • ·         Developing and producing printed promotional materials


This is just a brief overview of the sales tax laws regarding the sale of advertising services.  Feel free to give our office a call for more information.


By Renee Greenspan




Wednesday, December 12, 2018

New Jersey Offers Tax Amnesty




For a limited time, the State of New Jersey is offering a tax amnesty program to give delinquent taxpayers a chance to catch up on filing and payment and save on penalties and half the interest due.  The program runs until January 15, 2019.
 
Returns administered by the New Jersey Division of Taxation that were due on or after February 1, 2009 through September 1, 2017 are eligible for the program.  Property taxes and payroll taxes are not eligible.  The program helps taxpayers avoid most penalties, collection fee costs, and ½ of the interest that would otherwise be due!  Civil fraud penalties and criminal penalties are not waived.

To qualify under this program, all required tax returns and any associated tax amnesty payments must be received by the State by January 15, 2019.  There are no extensions to that date.

After the amnesty period, all penalties and interest will apply along with an ADDITIONAL 5% penalty.

To see what taxes are and are not covered, visit the NJ Tax Amnesty webpage at https://www.taxamnesty.nj.gov/guidelines.shtml.

Honorine M. Campisi, CPA