Tax Deductions

The Business & Tax Benefits of Westchester County

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Thinking of starting a business?

Westchester County is the perfect place to start a business. There are lots of countywide programs to get your business off the ground and geographical benefits from being in Westchester County.

Proximity to NYC

Depending on where you are in Westchester County, you’ll be close to the bustling economic center of New York City without having to deal with commuting to the city.

You’ll also be located close to Connecticut and parts of upstate New York.

That means you’ll be within drivable range for all of these areas.

Get Ahead With Westchester’s IDA Program Benefits

Westchester County Industrial Development Agency (IDA) can help you grow or start your business.

Use the benefits from this program to:

  • Build or renovate office parks or buildings
  • Develop mixed-use projects including hotels, marketers, medical office space, etc.
  • Support extensive multi-family and multi-use residential

This past January, the agency funded $391 million worth of residential projects in 2019. They’ve helped get hundreds of businesses off the ground and have given them a variety of benefits. For more details, check out IDA’s website.

Tax Exemptions

The IDA agency can also provide exemptions for use and sales tax in the following areas:

  • Construction
  • Furnishings
  • Business equipment
  • Related capital improvements

Check out the policy here.

Westchester County wants businesses to move in, so find out what both the county and the town/city you’re in offers in the way of incentives.

Image: Fred Murphy/C.C 2.0

Preparing for Tax Season 2019

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We know it’s not even Christmas yet, but some of you are probably wondering what the new tax law will mean for your finances heading into 2018. The news can’t decide if the changes are good or bad, but the answer for you will depend on your individual circumstances. Here is some basic information to help give you an idea of what to expect, but don’t worry. This is what we do best.

Standard Deduction Doubled

You may be familiar with the standard deduction. Many people use it rather than itemizing. For 2018, the amount of the standard deduction will roughly double:

  • $12,000 for single filers, up from $6,350
  • $24,000 for married filing jointly, up from $12,700
  • $12,000 for married filing separately, up from $6,350
  • $18,000 for heads of household, up from $9,350

This means that many of you may receive more money back when you file your taxes. This increase is balanced by changes to many deductions.

Deductions and Exemptions Removed

The increase in the standard deduction is balanced by the removal of several individual deductions and exemptions, including all of the miscellaneous itemized deductions. Many of these apply to specific life circumstances, so they may or may not affect you. Examples include:

  • The personal exemption (an amount claimed against income for the filer and each dependent;
  • The unreimbursed employee business expense (when an employee pays business expenses out of their personal funds—such as nurses, salespeople, and educators); and
  • The home office deduction (for those who work out of their homes and pay for services related to their work).

Deductions Changed

While many deductions were removed, some of the most commonly used were preserved, though altered.

  • The mortgage interest deduction was limited going forward. It will only apply to a mortgage to purchase, renovate, or build your home up to $750,000 (up to $375,000 if married filing jointly).
  • The medical expenses deduction was made more accessible by lowering the floor to deduct such expenses from 10% of income down to 7.5% of income.
  • The child tax credit was expanded to $2,000 per qualifying child and is potentially refundable up to $1,400.

Conclusion

There are many changes starting with your 2018 taxes that will affect whether you get more or less back when you file. It can seem very confusing and overwhelming, but we are here to help you when the time comes. You don’t have to do it alone.

When an Elderly Parent Might Qualify as Your Dependent

Westchester NY accountant Paul Herman of Herman & Company CPA’s is here for all your financial needs. Please contact us if you have questions, and to receive your free personal finance consultation!

It’s not uncommon for adult children to help support their aging parents. If you’re in this position, you might qualify for an adult-dependent exemption to deduct up to $4,050 for each person claimed on your 2017 return.

Basic qualifications

For you to qualify for the adult-dependent exemption, in most cases your parent must have less gross income for the tax year than the exemption amount. (Exceptions may apply if your parent is permanently and totally disabled.) Social Security is generally excluded, but payments from dividends, interest and retirement plans are included.

In addition, you must have contributed more than 50% of your parent’s financial support. If you shared caregiving duties with one or more siblings and your combined support exceeded 50%, the exemption can be claimed even though no one individually provided more than 50%. However, only one of you can claim the exemption in this situation.

Important factors

Although Social Security payments can usually be excluded from the adult dependent’s income, they can still affect your ability to qualify. Why? If your parent is using Social Security money to pay for medicine or other expenses, you may find that you aren’t meeting the 50% test.

Also, if your parent lives with you, the amount of support you claim under the 50% test can include the fair market rental value of part of your residence. If the parent lives elsewhere — in his or her own residence or in an assisted-living facility or nursing home — any amount of financial support you contribute to that housing expense counts toward the 50% test.

Easing the burden

An adult-dependent exemption is just one tax break that you may be able to employ on your 2017 tax return to ease the burden of caring for an elderly parent. Contact us for more information on qualifying for this break or others.

Any U.S. tax advice contained in the body of this website is not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions.