The tax law changes that went into effect in 2018, changed many things but tax planning moves are still available that can be implemented before the end of the year that can reduce your taxes in 2019. Whether you are self-employed or a W-2 employee, there are strategies available now that can reduce your tax bill if you act before the end of the year.
This year marks our second year living with the sweeping tax law changes passed at the end of 2017, known as the Tax Cuts and Jobs Act. How did you fare under the new tax law, or do you know?
Many tax payers had pleasant surprises when they filed their 2018 returns, with smaller tax bills and/or larger refunds than usual. But some tax payers felt like they didn’t benefit from the tax cuts at all. As we met with clients in 2019, we found that for some of those clients the total tax paid was in fact higher, but due to higher income levels (from a strong economy and stock market), while tax rates actually did decline from pre-2018 levels. Unfortunately, for a significant minority of our clients, both rates and taxes paid were higher due to limitations on mortgage interest deductions, the elimination of personal exemptions and the cap on state and local tax deductions (the so called “SALT” deductions).
Regardless of which camp you found yourself in after filing your 2018 taxes, there is still time to minimize what you will owe for 2019 with smart planning. We have listed 9 tips to consider between now and year-end.
“How did the new tax bill affect me?” was the question on everyone’s minds this tax season, and for good reason. Even though this was touted as the greatest simplification of the tax code in my lifetime, I didn’t notice any reduction in time spent preparing returns. Those of you who reviewed your returns in detail noticed that the schedules look drastically different although contain all the same information. The short answer for many is that it didn’t materially change your overall tax liability. The outliers fell into one of a few buckets…
Here are 10 things to consider as you weigh potential tax moves between now and the end of the year.
1. Set aside time to plan
Effective planning requires that you have a good understanding of your current tax situation, as well as a reasonable estimate of how your circumstances might change next year. There’s a real opportunity for tax savings if you’ll be paying taxes at a lower rate in one year than in the other. However, the window for most tax-saving moves closes on December 31, so don’t procrastinate.
Hurricane Irma victims in the entire state of Georgia now have until Jan. 31, 2018, to file certain individual and business tax returns and make certain tax payments, the Internal Revenue Service announced today.
While no one can predict the future, the possibility of tax reform is once again in the spotlight. If it occurs, it may very well include repeal of the federal estate tax and related changes to the federal gift tax, the federal generation-skipping transfer (GST) tax, and the federal income tax basis rules.
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