December 31st, 2017
TAX TIP OF THE DAY... year end tax planning BEFORE 2018
Sorry America, but you will lose many beloved tax deductions starting in 2018. So it's time to party like it's 1999!!! LAST CALL.
You have a few days left to squeeze in some of your favorite tax deductions for possibly the last time ever:
1) farewell charity donations... most taxpayers won't deduct charity donations anymore... LAST CALL. Load up the car with the clothing donations and get a receipt. Pre-pay your church donations by 12/31.
2) farewell home equity loan interest... LAST CALL. If you are in the middle of closing a home equity loan deal, finalize by 12/31. If you were considering a home equity loan in the next 12 months, DO IT NOW by 12/31.
3) farewell employee mileage and expense deductions... LAST CALL. If you need office furniture, tools, equipment, supplies, etc. BUY NOW by 12/31.
4) farewell moving expenses... LAST CALL. If you are in the middle of a move, pay any related expenditures such as truck rentals by 12/31.
5) farewell alimony deduction... LAST CALL. If you are negotiating alimony payments, sign the documents by 12/31 in order to deduct. The ramifications of this tax change alone are staggering and could cost/save many thousands of dollars over the alimony payment period. (Conversely, if you are negotiating alimony income, do not sign the documents until 2018 to have tax free alimonay income.)
6) farewell investment advisor fees... LAST CALL. Pre-pay 2018 fees by 12/31 if possible.
7) farewell deductions for property tax, sales tax, state tax, local tax... most taxpayers won't deduct taxes anymore... LAST CALL. If you have a bill in hand, pay it early by 12/31. But you aren't allowed to pre-pay taxes without a bill or payment voucher.
Some good news: Certain of the above have grandfather rules which will still allow deductions for existing home equity loan interest and alimony. The $250 teacher deduction was left intact. The AMT tax will be less. Overall tax rates are lower. Many businesses get a new generous 20% deduction.
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David S. Baboian, CPA