It’s that time of year again. When everyone’s mind and heart turns towards the annual Advent (like) countdown to the end of the 2018 tax year.
Sure, you could get wrapped up in the normal holiday rush of Christmas, family, well wishes, and all that stuff, or we could get down to some serious tax-planning – I’ll stop before you put this in the shredder.
Most of you know that we are now operating under a new tax plan. My guess is few know how it will affect them personally and if there is anything they should know or be actively doing before we close out the year. While I’m not a CPA, I do believe there are a few things we should all be considering before what we might do, turns into what we could have done.
The biggest change for most people surrounds the “Standard Deduction”. Way back in 2017 The IRS gave “married filing-jointly” the choice between the greater of your actual itemized deductions or $12,700, whichever was larger. These itemized deductions included things like; mortgage interest, property taxes, state income taxes, gifts made to qualifying charities, and a bunch of other things that I don’t have room to list. (This is good place to mention that this article is trying to provide some VERY BASIC information and not specific tax advice – Think of it as an introduction to some things to discuss with your tax pro.)
But now it is 2018 and the rules have changed quite a bit. The Standard Deduction (Married filing-jointly) is now $24,000. That’s a big jump. But sometimes when the government gives – it also takes away. You used to also get a (or many) Personal Exemption. For some of us, it was the only time our children were of any real financial value. That is now gone. This means that the actual tax-advantage of spending money on state income taxes, mortgages, charitable giving, your kids, etc. has changed for you. For some it will mean you pay less tax, for others it may mean you pay more.
The bottom line is – you need to know how these changes will affect you. Between now and December 31st, a lot of things can or could happen. A little planning might be helpful. We need to pay our taxes but if we can make what we owe smaller with a little planning… That’s money we get to keep for the family!
Of course, the changes are not just limited to the Standard Deduction and Personal Exemptions. Below is a list of some of the other changes that may affect your return or longer-term planning.
Income Tax Rates Estate Tax Exemptions Child Tax Credit
Mortgage Interest State and Local Taxes Contribution Limits for Retirement Plans
We know you have a lot to focus on this time of year. Let us help you find out where you are and how to get ready for the upcoming tax season.
Tax-Season's Greetings from all of us to you!
This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.