Making the Most of the New Tax Law

You may have heard that a new tax bill recently became law.  While the law generally pertains to tax years beginning in 2018, there may be things you can do before the end of the year to maximize your deductions or credits because of the differences that will exist in the law between 2017 and 2018.

Some of the more significant changes for individuals include the following:

  • Lowering tax rates for most every bracket
  • Increasing the standard deduction
  • Eliminating the personal and dependent exemption deduction
  • Increasing the child tax credit amount
  • Adding a new credit for dependents who do not qualify for the child tax credit
  • Increasing the phase-out limit for the child and dependent tax credits
  • Limiting the itemized deduction for state taxes (income, sales, property, etc.) to $10,000
  • Limiting the mortgage interest deduction
  • Eliminating the deduction for interest on home equity loans
  • Eliminating certain miscellaneous itemized deductions
  • Eliminating the deduction for moving expenses
  • Eliminating the penalty for not having a qualifying health insurance plan
  • Increasing the exemption for the alternative minimum tax
  • Increasing the exemption for the estate tax
  • Adding a new deduction for income from sole proprietorships or pass-through entities like S-corporations and limited liability companies

Because of these changes you may benefit from one or more of these actions before the end of 2017 that you otherwise would have waited to do until 2018:

  • Paying state property taxes or the expected balance of your 2017 state income taxes
  • Making charitable contributions
  • Accelerating the payment of unreimbursed employee expenses or moving expenses
  • Defer income into 2018 to take advantage of lower rates and/or the deduction for pass-through businesses

If you would like to take a more in-depth look at how this new law affects your situation, please call or email right away so that we can get together before the end of the year.

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