Tax Reform Bill and What it Means

Thanks to L.K. Benson for this issue of Tips from the Pros.

Over the past several months we have been closely following the tax reform bill and providing you with regular updates on the proposals and planning opportunities surrounding those proposals. Both the House and Senate passed the final version of the bill and received the President’s signature. The bill was signed into law and will be effective for the 2018 tax year. That leaves you with very little time to implement any tax planning strategies!

We have written a more detailed overview of the reform bill and some tax strategies you should consider before December 31 that you can find on our website here. Below is a brief summary of these planning ideas:

1. If you have not yet fully paid your 2017 state income taxes, consider making a payment before December 31, unless you think you could be subject to the Alternative Minimum Tax (AMT). NOTE: You cannot prepay your 2018 state income taxes in 2017!
2. If you have a bill for your 2018 real estate taxes, consider prepaying those before year end.
3. Accelerate charitable contributions into this year.
4. Fund your 529 plans before year end.
5. Defer income if possible.

It’s important to think through each of these aspects of the reform bill and how they might impact you. We know this is a busy time of year for everyone but time is running out to take some of these steps before year end. We will be in touch with further thoughts and strategies after we spend more time examining the details of the bill and thinking about its broader tax and financial planning implications. We wish you all a happy, healthy and prosperous 2018!