The details of the tax reform bills are emerging and some of the key features include a flat corporate tax rate of 21%, a top individual tax rate of 37%, and an election to choose either a property tax deduction or a state and local income tax deduction, up to $10,000.
For taxpayers in states with high income and property tax, the limit on the deductibility of these taxes next year will cause many people to lose these popular itemized deductions.
If you have the ability to prepay the property taxes that you owe in 2018, we recommend that you pay these taxes before the end of 2017. Prepaying state "income" taxes before the end of 2017 may also help reduce your 2017 tax if you are not subject to AMT (Alternative Minimum Tax).
The new tax bill, that is expected to be released this week, will double the standard deduction and limit the deductibility of some itemized deductions, so making any planned charitable deductions in 2017 or paying mortgage interest before year end may provide a benefit if you are not expected to itemize deductions next year.
Please contact us immediately if you are interested in having us run a tax projection to determine if you would benefit from any tax planning before year end.
