The president signed the tax reform bill into law today, guaranteeing big changes for 2018 and beyond. Some deductions are going away, because the standard deduction is much higher. It may be a move by lawmakers to discourage itemized deductions, a practice utilized by 28 percent of taxpayers.
There are still seven tax brackets, but the tax rates have changed. You may find yourself in a lower bracket than before. Also, the corporate tax rates have dropped. Therefore, you may need an experienced Tennessee tax attorney and CPA to take advantage of the changes (or to minimize its negative impact). Whether personal or business, you need a tax professional who knows how to get the most out of the regulatory apparatus.
Perhaps you want to make some changes to your tax strategy before the tax reform takes effect. The reform prohibits taxpayers from taking a deduction for prepayment of 2018 state and local taxes, but other strategies are available. You can increase your charitable giving, as that deduction remains unchanged, though as the article points out, you will need to itemize for that. In addition, the new reform does not allow take-backs. That is, if you put money into a Roth IRA, for example, you can only reverse that decision up until the end of this year. Prior to the law, you could change your mind all the way up through October 15 of the following year.
As mentioned previously, some deductions are going away, but there is still time to get with experienced Tennessee tax professionals like Burkhalter & Burkhalter. Many filers miss available deductions, and you could also use a pro to help you minimize your tax burden in the new tax regime. There are always benefits and costs, but with trusted attorney and tax experts like Burkhalter & Burkhalter, you don’t have to worry. As always with legislative changes, there is excitement and even a little misinformation. But a steady hand goes a long way to making people feel comfortable. Call today for a free consultation.