The Tax Cuts and Jobs Act (TCJA), passed on December 22, 2017, lowered taxes on both individuals and businesses by expanding the tax brackets, introducing the Qualified Business Income deduction, and lowering the corporate tax rate. Also included in the TCJA was the introduction of the Opportunity Zones under IRS Codes 1400Z-1 and 1400Z-2. The Opportunity Zones offer generous tax breaks that were introduced to “spur private investment in distressed communities” by either lowering or completely eliminating capital gains depending on how long you hold the qualified investment.

There is a new 20 percent tax cut for small businesses that is part of the 2017 Tax Cuts and Jobs Act (TCJA) which was passed on December 27, 2017. It’s called the Section 199A Qualified Business Income Deduction. Since the passage of the TCJA, there have been hundreds of articles on the topic, some in favor of the act and others opposed. Some taxpayers are excited about the lower tax rates and others are nervous about how their taxes will change. Most importantly, small businesses are utterly confused as to whether they qualify for the generous Section 199A deduction, which is considered the biggest tax cut of all. This article breaks down each section of the 199A and helps readers determine if they qualify.

The Senate passed their version of the massive tax bill late Friday night while Americans were asleep. By now you’ve heard about the passage of the Tax Cuts and Jobs Act by the House of Representatives last month. On Monday, the House and the Senate will come together to reconcile their differences to present a final bill for President Trump to sign into law. The biggest difference and what will become most contested is the individual mandate of the Affordable Care Act (Obamacare), which requires taxpayers to buy health insurance or pay a fine. What eventually becomes law is unknown, but the table below will help compare how the current tax rules differ under the bills passed by the House and the Senate.

1. Can I convert a portion of my IRA to a Roth IRA?
Most people assume that if you convert a Traditional IRA to a Roth IRA, you must convert the entire Traditional IRA balance. However, you can decide how much of your Traditional IRA you want to convert to a Roth IRA rather than converting the entire amount all at once. There are benefits to converting gradually because when you convert a Traditional IRA to a Roth IRA, you must report the converted value as income and pay tax. The option to gradually convert can be especially helpful if you have a large traditional IRA balance and you don't want to report the entire amount as income in one year, but would instead prefer to spread your tax liability over a few years. Just remember to complete IRS form 8606 when doing the conversion to accurately capture cost basis.

1. How can I estimate how much I will need during retirement?
This question comes up often because when we prepare financial plans for clients, we usually ask how much they want to spend during retirement. Understandably, the question is not easy to answer. When preparing a financial plan, we initially assume a person will need 70 percent of their current living expenses during retirement and increase or decrease the amount based on the likelihood of meeting the target that goal. For example, if your current annual living expenses are $120,000, we would begin your financial plan assuming you will spend $84,000 a year during retirement. If the results of your plan are unfavorable, we will recommend a combination of the following: save more, retire later, and/or reduce how much you plan to spend during retirement.

1. Can I reverse a Roth IRA contribution because my income was higher than I expected?
Yes. It is actually very common for people to make a Roth IRA contribution in the beginning of the year and realize later that they do not qualify for a Roth IRA. The solution is very easy and usually involves just filing out a form. Your custodian (the firm that holds your Roth IRA and sends you monthly statements) will have a form for you to complete. You can either reverse the Roth IRA contribution entirely or recharacterize the contribution as a non-deductible IRA. The non-deductible IRA option may be more appealing, especially if you want to do the backdoor Roth IRA.

1. Does checking my own credit report affect my credit score?
When shopping for a car, a home, or even applying for a new job, the worst thing that can happen is that you realize there is a mistake on your credit report. It is important to note that your credit report and your credit score are two different things. The credit report is all the information credit reporting agencies have about you while your credit score is the quantitative assessment of that information to rate your likelihood of paying back debt. Therefore, your credit score is based on the content of your credit report. Because employers and lenders use your credit score to judge your character, it is extremely important to check your credit report annually to ensure there are no mistakes and correct errors before they cause you problems. The law entitles you to one free credit report every 12 months from each credit reporting agency (Equifax, TransUnion, and Experian.) Despite common myths, checking your credit report does not affect your credit score. If you identify an error in your report, the Federal Trade Commission has very detailed checklists on how to correct your report.

1. Should I increase my car insurance deductible?
Like any insurance, the higher your deductible, the lower your premiums. But the question is how much of a deductible is reasonable? There are two types of coverages that call for a deductible: comprehensive and collision. Comprehensive coverage protects you from things like theft, natural disasters, and other non-crash related accidents while collision coverage protects you from car accidents. Here is a short list of things to consider when deciding whether to increase your insurance deductible to lower your premiums.

1. I just started at Kaiser, how can I maximize my benefits?

Most investors focus only on their retirement accounts such as 401ks, IRAs and pensions and overlook another powerful savings vehicle - the taxable brokerage account. The taxable brokerage account is like a supercharged savings account; just like a savings account, your money is accessible at anytime, but unlike a savings account, you can use a taxable brokerage account to invest in anything such as stocks, bonds, real estate, commodities, etc. The real benefits of taxable brokerage accounts are when investors use the tax laws to their advantage. Below are three of the most commonly used tactics high income earners exercise to minimize and manage their taxes.