The Tax Rewrite is Here, What to Consider Today
December 19, 2017
There are many unprecedented changes happening in the proposed tax code rewrite. Reducing tax rates, increasing income thresholds, increasing the standard deduction, and elimination of other routine breaks. We are committed to keeping you informed and assuring accurate tax preparation, strategic tax planning, and navigating safely within the current laws.
Things to consider before year-end:
State Income and Property Tax Deductions – The new tax bill limits your ability to deduct all of your state income taxes paid and your property taxes paid. For those taxpayers not subject to Alternative Minimum Tax (AMT), we recommend paying your state 4th quarter estimated payment prior to 12/31/17 so it can be deducted on your 2017 tax return. If you are unsure if you will be subject to AMT in 2017 then we also recommend paying it by 12/31/17.
529 Plans – This is not just for college anymore. Home school, private and religious school and families with disabled dependents may benefit from the new tax bill. Currently, funding a state-approved 529 plan may offer some state income tax deductions, in addition to growing tax fee of capital gains taxes and offering tax-free withdrawals for higher education. The new plan looks to allow withdrawal access up to $10,000 each year, per child, to pay for private or religious schools with the same tax favorable treatment. Home schoolers can access now, and families can roll 529 funds over into ABLE accounts which offer tax advantages for people with disabilities.
Investment Advisory, Tax Preparation and Unreimbursed Business Expenses – Paying these bills now may prove helpful for 2017 because, as of 2018, those deductions will no longer be allowable, barring more tax rewrites.
Many of these new provisions are set to expire after seven years but all take effect in 2018 and there are literally hundreds of other changes, extensions, and deletions that we will consider this tax season while preparing your returns. Rest assured that we will continue to utilize our best resources to continue to provide you with timely, complete, and accurate services while keeping your tax burden to the lowest legal amount. Be sure to contact us with any questions before year-end so that we can advise your best use of the considerations mentioned above.