This is an especially difficult year to do year-end tax planning. With major tax overhauls proposed in both the House and the Senate, it seems likely that substantial changes are coming for 2018. As of this writing, however, it is still unclear which provisions will be enacted, or even if a tax bill will be completed at all.
With that in mind, we would like to share with you some actions you may wish to consider taking before the ball drops on New Year’s Eve. We’ve organized these into three groups: preparing for tax law changes, saving money with this year’s taxes and items that need attention every year.
Before taking any action based on possible new tax code provisions or the strategies outlined in this letter, we strongly encourage you to consult with your tax professional.
The biggest proposed change affecting most people’s income tax is that many itemized deductions are being eliminated and the standard deduction is being increased. If passed into law, this will mean that many of you will have lower itemized deductions or will take the standard deduction, thus in effect having no itemized deductions. Some implications for this year’s tax planning are:
In addition to those items listed above, here are some ways to cut your taxes that are unlikely to be affected by new tax rules:
While these items don’t necessarily provide any immediate tax savings, they need to be attended to each year:
We’ve covered some of the main points of year-end tax planning and hope that you find this list useful. However, taxes are complex and changes are afoot, so please check with us and your tax professional about what may be best for your personal situation. We look forward to working together to develop and execute tax management and other strategies to help you get the most out of your money.
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