One of the biggest professions that will be impacted by the new tax law is law enforcement professionals. At JRG Taxes CPA we do a lot of individual and business tax returns for officers.
Overall we at JRG Taxes CPA believe that the new tax law will positively impact most taxpayers. However, compared to other professions, law enforcement as a group could see a discorporate amount of individuals who will be worse off with the new changes. Keep reading to learn about the two biggest tax issues that will impact officers starting in 2018 and learn how to make the tax code work for you.
Situation #1: You purchase a lot of gear and have been deducting it on your tax return for many years.
What is going to change? Starting in 2018, all personal business expenses will be eliminated. This means that some officers will not be able to take any job expenses such as guns, ammo, dues, phone, internet, etc.
Solution: If you weren't working extra jobs before, pick some up to unlock gear, auto, and other expenses. Officers who have extra job income will be able to deduct job expenses. If you don't have extra job income, you will not be able to deduct the expenses.
Situation #2: You work a lot of extra jobs and all of a sudden you have $10k - $30k in 1099 income.
Solution: Think about forming an LLC as a security services firm and elect to be treated as a Small Business Corporation. Millions of other small business owners use this structure and it could save thousands of dollars for an investment of hundreds of dollars (Note: There are 50 states with 50 sets of LLC rules. Contact us with questions on how to navigate your state's rules)
Being able to navigate these two situations can be tricky. Here at JRG Taxes CPA, we have prepared thousands of police officer and law enforcement tax returns. We know how to make the tax code work for you. Give us a call/text today at 682-225-4637 or email us at JR@JRGTaxes.com with any questions about your situation.
JR Gramstad CPA