END OF YEAR PLANNING FOR RETIREMENT PLAN DISTRIBUTIONS.
If you are 70 1/2 or older, don't forget to take your required minimum distribution for the year as there are penalties if you don't. If you are retired, but younger than 70 1/2, consider taking distributions from your retirement accounts. By paying some tax on the distribution now, you may avoid paying higher taxes later when you have to follow the minimum distribution rules.
We provide individual and business tax planning.
On December 22, 2017 the Tax Cuts and Jobs Act of 2017 was signed in law. This is the largest tax change since the 1986 Tax Reform Act. This does not affect 2017 taxes with most all of the provisions going into effect in 2018. Personal Exemptions and Standard Deductions are changed. The new law repeals the personal exemptions, but nearly doubles the standard deduction amounts to $24,000 for joint filers and surviving spouses, $18,000 for heads of household, and $12,000 for single (additional amounts for the elderly and blind are kept). This may hurt those with many dependents but help those who previously did not itemize. Although the standard deduction has nearly doubled this may not save very much in taxes as the personal exemptions are gone. This is complicated so give us a call regarding you specific tax situation.
Passthrough Tax Break. There is a new 20 percent deduction for qualified business income from sole proprietorships, S corporations, partnerships, and LLCs taxed as partnerships. This new tax break has some restrictions and limitations and is claimed by individuals on their personal tax returns.
Mortgage Interest and Property Taxes in 2018. Some of the provisions of the new tax law (TCJA) is that it reduces from 1 million to $750,000 the limit on the loan amount for which a mortgage interest deduction can be claimed by individuals, with existing loans grandfathered. Interest on home equity loans is no longer deductible. There also is a $10,000 total limit on real estate and sales taxes. This could hurt those with vacant land or second homes.