Maurice Goulet, DPW Director, this morning shared this update with a neighbor on the status of the Philip Street bridge replacement –
“Yes, the final contract documents have been signed for the fabrication. The fabricator has begun the manufacturing process of the top deck. The company has submitted their required shop drawings and field measurements. The fabrication is scheduled to be completed in March. As we get closer we can narrow down the delivery of the deck. MassDOT has given their final approval of the entire project, we are moving forward with the procurement of the contractor for installation.”
This from the ABA – “Pass-through businesses include partnerships, Subchapter S corporations and sole proprietorships. . . – owners of pass-through businesses can take a 20 percent deduction for qualified business income they receive from the entity.”
There is a link to the 570 page Conference Committee report with more explanation.
Law firms and other professional service entities won’t be entirely excluded from tax relief for pass-through entities in the final version of the tax bill that is awaiting passage.
The consensus provision on pass-through businesses is in many ways a victory for the ABA. The association had lobbied Congress to accept the Senate version of the tax bill giving a tax deduction to owners of pass-through businesses, including professional service firms.
The House version of the bill would have excluded law firms and all other professional service business from pass-through tax relief, and it would have lowered the maximum tax rate rather than provide for a deduction.
The conferees accepted the Senate approach, but did not eliminate caps that phase out the pass-through deduction for higher-income professional service providers. The ABA had asked conferees to drop the phase-out.
Pass-through businesses include partnerships, Subchapter S corporations and sole proprietorships. Income for such entities pass through to the owners’ individual returns, where it is currently taxed at ordinary income tax rates.
Under the consensus bill, owners of pass-through businesses can take a 20 percent deduction for qualified business income they receive from the entity, according to the Washington Post, the conference report (PDF) and the conference committee’s joint explanatory statement (PDF, see pages 20-40). Qualified business income is nonwage income that is calculated according to a formula. The deduction in the original Senate bill was 23 percent.
The tax deduction is phased out for owners of professional services businesses whose taxable income exceeds $315,000 for married individuals filing jointly or $157,500 for individuals. The threshold in the consensus bill is lower than the thresholds of $500,000 and $250,000 that were in the original Senate bill.
Many high-income law firm partners will still benefit, however, because the final tax bill lowers the top individual income tax rate from 39.6 percent to 37 percent. The bill also increases income thresholds for the higher tax brackets.
The ABA position also prevailed in regards to these provisions in the consensus bill:
• The student loan tax deduction is preserved.
• Some contingency-fee lawyers will still be able to deduct upfront litigation-related expenses. Lawyers within the jurisdiction of the San Francisco-based 9th U.S. Circuit Court of Appeals are permitted to deduct such expenses.
• There is no requirement that high-income law firms or other professional service businesses use accrual accounting. The accrual method would have forced many law firms to pay taxes on accounts receivable and other “phantom” income they hadn’t received and may never receive.
The ABA Section of Taxation had asked Congress (PDF) to preserve the deduction for tax code compliance expenses. But the final tax bill prevents a deduction for costs connected with the determination, collection, or refund of any tax unless the expenses are for the production of income.
This suggestion is from Needham selectman, former Norfolk County administrator, and attorney Dan Matthews – Dan suggests accelerating the payment of the rest of your FY18 real estate taxes before the end of the calendar year, if you will not get to deduct the full amount in 2018, due to the new federal tax bill (I believe local real estate taxes will only be deductible up to $10,000/year starting in 2018).
If a combination of cheery greetings, politics, and tax accounting is too much for one email, please accept my Best Wishes for the Holidays and ignore the rest of this.
But it’s become apparent that as a result of the latest tomfoolery in Washington, almost every Massachusetts homeowner who will itemize deductions for 2017 can save measurably on US income taxes by pre-paying the second half of their FY18 city/town property tax (i.e., the payments that will be due in Feb and May of 18) NOW, before Dec. 31.
Not everyone can swing that on such short notice. If your taxes are paid from mortgage holder escrow, you would have to notify the bank (and still probably have to do the prepay yourself and adjust later). And there are only four business days left in the year. And did we say the Holidays?
But with some exceptions, the dollar amount involved equals approximately the half-year property tax bill times your marginal US tax rate, which should make the effort worthwhile for (tens of?) thousands of people in MA, most who know little if anything about this.
I’m sending this along to friends who may be affected or themselves have friends or family it applies to.
I’m not a tax expert, and everyone’s situation is different- if you have questions, you may want to check with a tax advisor. But this is the basic information as I understand it.
Some cities/towns are posting prepayment information of their websites, and there is likely to be news information about this as well, but the window is short.
If you feel guilty about taking advantage of this break you can:
– consider it part of your patriotic duty to help show how wrong and reckless this new tax law is.
– make an additional donation to the charity of your choice (still deductible!).
You did it again! You all came out in good cheer and with bells on to make the 2017 MFi Angel Run one for the record books. With your participation we can know that those in our community who need some extra assistance will have their needs met. The generosity of time, talent and enthusiasm from all is the reason we put this event on year after year. Together we are building a stronger Medfield and truly helping our fellow community members.
MFi has a Flickr site with high resolution photos available for you to downloadat no charge. Photos will be added as they become available. Be sure to follow us on social media for notifications. And if you have any photos, be sure to upload them so everyone can benefit!
Go to Flickr to see hi-res photos from the 2017 Angel Run
In addition, RaceWire, the company that provided the timing system at the event, took photos at the finish line. Here is how to see those picures.
Don’t forget that the Angel Run survey is still open and we value your feedback. Please reply by 12/31/17 to help us make the race even better for next year.
We Need Your Help!
A few of our key team members have “retired” and we are looking for people to join the team to help plan the 2018 event. As you know, the Angel Run is fully run by volunteers from the community and we cannot do it without people being generous with their time and skills. Specifically, we know we need volunteers in the areas of Treasurer, Post Race Party Coordination and Marketing and Communications. We have an experienced group of leaders and a great team that work closely together and will help any new volunteers with any questions. We’d love to have your involvement, so be sure to respond in the survey and let us know if you would like to help or if you have any questions at all.
Thank You and Save the Date
Save the date for the 2018 MFi Angel Run on December 2, 2018. We hope to see you there. Cheers to all and many thanks from the bottom of our hearts,
The 2017 MFi Angel Run Committee
When I sent you the article Tony Centore submitted, I thought all of the sheets were for the same article. In certifying the signatures, Carol found that there were four separate petitions submitted. I’m sending them to you for your information. Carol said that petition (D) is the same as petition (A) and that the signatures were the same so she did not certify petition (D). That means that petitions (A), (B), (C) and (E) have been certified, so there will be four citizen petitions on the warrant relating to senior housing. All five petitions are scanned, but only four articles will be on the warrant. Sorry for the confusion. Mike
I started this blog to share the interesting and useful information that I saw while doing my job as a Medfield select board member. I thought that my fellow Medfield residents would also find that information interesting and useful as well. This blog is my effort to assist in creating a system to push the information out from the Town House to residents. Let me know if you have any thoughts on how it can be done better.
For information on my other job as an attorney (personal injury, civil litigation, estate planning and administration, and real estate), please feel free to contact me at 617-969-1500 or Osler.Peterson@OslerPeterson.com.