Category Archives: Financial

More about what was in the tax bill

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.

=============================================================

Consensus tax bill includes law firms in pass-through tax relief, with limits

Congress

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.

Advertisements

Tax payments now might save on taxes later

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).

Merry Christmas!  Happy Holidays! 

=================================================================

Dear Friends-

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!).

 

I hope this is helpful.Happy Holidays!

 

Dan Matthews

 

 

 

 

 

BoS on 11/21/17

Here is an updated agenda and the back up materials.  These back up materials contain the Schedule A financial summary the Town of Medfield files annually with the Massachusetts Department of Revenue, that gives a complete summary of the town finances.

20171121-Meeting Materials

MEETING I PPSTED TOWN CLERK·. TOWN OF MEDFIELD t{LCl::.ivtu · l'UWN OF MEDFIELD. MASS NOTICE POSTED IN AccoRDANcE wITH THE PRovisioNs oF M.G.L. cHAPrE28n9r~H,U~3~ WMENDED. Board of Selectmen OFFICE OF THf TOWN 8LERK Board or Committee PLACE OF MEETING DAY, DATE, AND TIME Town House, Chenery Meeting Room, 2"d Floor Tuesday, November 21, 2017 7:00PM Agenda (Subject to Change) 7:00 Call to Order Disclosure of Video Recording Announcement We want to take a moment of appreciation for our Troops serving in the Middle East and around the world. Appointments 7: 15 Medfield State Hospital Building and Grounds Committee Citizen Comment Action Items Selectmen are invited to the Eagle Scout Court of Honor on Saturday, December 2, 2017. Vote to sign the Eagle Scout Certificate of Achievement for: Garrett Theodore Gipson Roberta A. Raine Tyler James Hatch Stephen Daniel Williams Discussion of Board of Selectmen 2018 A TM Warrant Articles Pending Items Town Administrator Evaluation Discussion Town Wide Goals Veterans Service Officer Annual Appointments Lot 3 Discussion MSHMPC issuance ofRFP for Facilitation Services Licenses and Permits (Consent Agenda) Katie Walsh, owner of Capsule, requests a one day Liquor permit for the Holiday Stroll on December 1, 2017 from 5PM to 9PM. (70 North Street) MEMO requests a Parade Permit for the Annual Holiday Parade on Saturday, December 2, 2017 at 1 :OOPM. MEMO also invites the BOS to lead the parade and participate in the Tree Lighting Festivities on December 1, 2017 at Baxter Park. Town Administrator Update Update on 11/17 meeting with the DOT and Legislators regarding West Street/Route 109 Bridge Informational 2017 Schedule A Town House closed at lPM on Nov 22. Closed on 11/23 and 11124 for Thanksgiving Holiday. Cushman House Lottery Application for 67 North Street20171121-agenda-final_Page_2

Public Safety Building was a bargain

The table below about Public Safety Building costs was shared this week, first by a Gilbane Construction employee with Mike Quinlan, chair of the Building Committee, then to Mike Sullivan, and then to the Board of Selectmen.

To me it is reassuring to see both that the cost of our Public Safety Building was relatively low, but also that our size comports with what other towns are deciding to build, which reaffirms the appropriateness of the recommendations of the Building Committee about the size of a building that was needed.  Congratulations and thanks are again in order to the Building Committee for successfully steering the town through that project!

I have had many meetings in both conference rooms that are available for public use in the Public Safety Building, and can attest to both their quality and utility.

Publis safety bld prices

 

This was the accompanying email from Mike Sullivan that makes our low cost per sq. ft. even more remarkable –

FYI. This came in this morning from Mike Quinlan. Confirms what we’ve been hearing about what a good price (relatively) we got on out public safety building. Especially since our project included construction of the Dale St. School parking lot, repair of the Adams Street basketball/tennis court, and installation of solar panels. Even better, we still have over $500K left in out accounts. Mike S

Municipal Facilities Evaluation and Capital Plan

Jerry McCarty, Facilities Director, presented his tome, Municipal Facilities Evaluation and Capital Plan, to the Board of Selectmen on Tuesday.

Jerry’s work evaluates the current conditions of the town buildings, lists deferred maintenance, and lays out routine expected maintenance over the next 20 years. This is the first time that the town has had this data compiled, and the bad news is that we have allowed about $43 m. in deferred maintenance to accumulate and we face an estimated $68 m. more of routine maintenance over the next 20 years.

We owe Jerry a huge thanks for taking on and completing this task, much of it done on his own time, so as to not interfere with his regular work. Jerry will include the pavement management plan when that is completed, and add sections for the Public Safety Building, the DPW Garage, and the Dwight-Derby House when his has the time. Then if we add the vehicle replacement schedule we should have most town capital expenses covered and we can plan how to implement the work and pay for it. It would have been better to plan this way long ago.

This is a link to the whole 558 page report  Medfield Facilities Report 10-2017.pdf

And these pages are the Executive Summary (NB – I left out the text of all 558 pages in the “Alt. Text” window which allows all the text to be word searched, as I think that amount of data may have been what was crashing the prior two attempts to post this, as that had to be a lot of data) –

 

Pages from 20171013-Municipal Facilities Evaluation and Capital Plan_Page_1

Pages from 20171013-Municipal Facilities Evaluation and Capital Plan_Page_2Pages from 20171013-Municipal Facilities Evaluation and Capital Plan_Page_3Pages from 20171013-Municipal Facilities Evaluation and Capital Plan_Page_4Pages from 20171013-Municipal Facilities Evaluation and Capital Plan_Page_5Pages from 20171013-Municipal Facilities Evaluation and Capital Plan_Page_6Pages from 20171013-Municipal Facilities Evaluation and Capital Plan_Page_7Pages from 20171013-Municipal Facilities Evaluation and Capital Plan_Page_8Pages from 20171013-Municipal Facilities Evaluation and Capital Plan_Page_9

 

Municipal Facilities Evaluation and Capital Plan

Municipal Facilities Evaluation and Capital Plan