Still No Tax Law – 12/5/17
It is already December and the biggest tax changes since 1986 are on the table. The House and Senate bills have big differences still, making it difficult to plan before the year-end.
Some suggestions are logical despite the uncertainty. We know there will be changes. Some deductions will disappear or change in 2018. Tax brackets are changing. Standard deductions are increasing and personal exemptions could be eliminated.
- Since state and local income tax deductions may go away, if you make estimated payments and itemize deductions, make all your state and local 4th quarter payments before Dec.31st for a larger 2017 deduction.
- Another itemized deduction item, mortgage payments due in January can be paid in December and increase deduction.
- Homeowners can also pay real estate taxes in December instead of January.
- If you plan to make some charitable contributions in 2018, you might want to make them in 2017 in case you don’t itemize in 2018.
- In addition to deduction planning, delaying income can be beneficial to self-employed individuals. Sending year end invoices in January will move your income into 2018.
These are general suggestions that will help some taxpayers and not others. Hopefully by the time your 2017 taxes are done we will understand how the changes will affect your 2018 tax filing.