As the end of the year approaches, it is a good time to think of planning moves that will help lower your tax bill for this year and possibly the next.
Year-end planning for 2018 takes place against the backdrop of a new tax law-the Tax Cuts and Jobs Act (TCJA) that make major changes in the tax rules for individuals and businesses. These have marked the most changes to income taxation since the Tax Reform Act of 1986. Most of the provisions in the TCJA passed at the end of 2017 and became effective this year. In addition, the landmark decision in the Wayfair case dramatically altered the state tax landscape for sales and use tax. These changes bring a host of uncertainties as well as planning opportunities.
For individuals, there are new, lower income tax rates, a substantially increased standard deduction, severely limited itemized deductions and no personal exemptions, an increased child tax credit, and a watered-down alternative minimum tax (AMT), among many other changes. For businesses, the corporate tax rate is cut to 21%, the corporate AMT is gone, there are new limits on business interest deductions, and significantly liberalized expensing and depreciation rules. And there’s a new deduction for non-corporate taxpayers with qualified business income from pass-through entities.
We have compiled a checklist of actions based on current tax rules that may help you save tax dollars if you act before year-end. Not all actions will apply in your specific situation, but you (or a family member) will likely benefit from many of them. We can narrow down the specific actions that you can take once we meet with you to tailor a personalized plan.