Many are inquiring how the Tax Bill (GOP Tax Plan) will affect them. I have received several calls regarding the tax changes and what should be done before the year is over.
If you itemize your return, you may want to prepay some expenses before the new tax changes take effect January 1, 2018.
You may want to consider prepaying:
- Property Taxes – Effective 2018, State and Local Tax Deductions will be capped at $10,000. In anticipation of taxpayers attempt to bypass the limitation, the tax bill specifically disallows prepayment of income taxes. However, you may prepay your property tax to take the deduction in 2017 before the limitation kicks in. Restrictions related to prepayment of property tax have not been specified.
- Employee Business Expense – This deduction for those who are unreimbursed or work from home will be eliminated effective January 2018. You may want to consider purchasing supplies or prepaying for items needed for use in your home office.
- Legal and Tax Advice/Preparation Fees – With the elimination of Certain Miscellaneous Deductions reported on Schedule A, you may want to consider prepaying for legal and tax advice/preparation services. Contact your attorney or accountant to see if this is an option.
- Medical Expenses – Congress ‘moved the floor’ allowing more medical expenses to be deductible in 2017. If you have or will incur high medical costs, you may want to pay the medical bills in 2017.
