2017 Tax Consideration

Merry Christmas from Taylor & Williams!

We hope that your days with family and friends are special as we celebrate God's love for us and Jesus birth!

2017 Tax Considerations

With 2017 wrapping up, this is a key time to consider some tax planning moves.  With Congress working on a substantial tax law (effective for 2018), these moves could be even more valuable based on these changes.  If passed, the law will reduce tax rates, increase the standard deduction, increase the child tax credit, limit or eliminate some itemized deductions, and eliminate personal exemptions.  While most should see a net tax reduction, a few may not.  Therefore, it is important to look at your own situation now.  

Here are 3 strategies to consider.  These are based on anticipating you getting a tax cut.  

Give to Charity by year end 2017.  With the 2018 tax rates being reduced, the deduction would save more actual tax and a whole year earlier.  In addition, with the increase of the standard deduction and reduction of itemized expenses, many who have itemized in the past will find themselves using the standard deduction in 2018, thus with no or reduced tax benefit from the charitable gift.  If you are able, you could pre-give your entire 2018 gifts.  (It may be good to inform the charity of this for their own planning purposes...)

Defer income.  While salaried workers typically don't get to choose when to be paid, any flexibility for business owners and investors to defer income would be wise.  Delay receiving or registering income till 2018.  Sell losing stocks / investments in 2017 and hold winners you intend to sell till 2018.

Take advantage of itemized deductions now that will change in 2018: Pay your 2017 property tax (plus you get a small savings here in FL for doing so). Employee unreimbursed expense deduction will be eliminated.  Pay and deduct now. Work-related moving expense deduction will be eliminated (unless military).  It may be hard to move in 2 weeks, but any moving expenses should be wrapped up in 2017. 

If you would like to talk over these or any other Financial Planning or Investment Management questions, contact us.  Glad to help.

Have a Merry Christmas!

Brent Williams, CFP®