14 Dec Tax Reform Update
As you likely know, Congress is steeped in a debate to change US tax policy.
One of the most common financial mistakes individuals make is not utilizing available tax saving strategies. This results in you paying more taxes than necessary and missing out on years of future growth on the tax savings amount. As a result, we wanted to make sure you are aware of the potential impact new policies may have and consider taking action before the New Year.
Currently, both the House and Senate have passed versions of a tax bill and efforts to reconcile them are underway. The House and Senate aim to finish reconciling the two versions into one bill shortly, with the goal of having a final version on President Trump’s desk by Christmas.
In the reconciliation process, negotiations will alter the final form of this proposed tax bill.
The #1 most important action step you can take TODAY is to contact your Certified Public Accountant (CPA) to determine if there are any planning strategies to implement before year-end. In particular, you should be evaluating if it is advisable to pull forward any currently deductible payments into 2017, including charitable contributions and items at risk of being eliminated or capped (such as property taxes, unreimbursed business expenses and state and local taxes).
Keep in mind, time-sensitive action items must be completed by December 31st.
One particular item to consider is that both the House and Senate’s proposed tax plan would eliminate the deduction for state and local taxes. Property taxes would be limited to $10,000 in both plans so consider prepaying a portion before 12/31/17 to maximize the benefit. We highly recommend you review the potential impact of these proposals with your CPA.
Please reach out to your advisor if you would like to discuss further.