How to Game Next Year’s Taxes Now
The federal tax overhaul put in place by Republicans has produced an unusual show of bipartisanship now that tax season is here: We are a nation united in befuddlement.
One bit of confusion to dispel quickly: The changes don’t affect taxpayers for the 2017 filing season, which officially begins Monday when the Internal Revenue Service accepts its first returns. That’s news to about 41 percent of the 2,000 Americans recently surveyed by tax prep chain Jackson Hewitt—they thought the tax law President Donald Trump signed on Dec. 22 would affect their filings this season (among millennials, it was 50 percent).
It should come as no surprise then that tax preparers and financial advisers are girding for a barrage of questions from clients about what they should do right now. As these experts scramble to educate themselves, the opaque nature of the new law and its unanswered questions—it was rushed through Congress so fast some changes were scribbled on the margins—have even left them confused.
”I attended my second tax update for CPAs today, where the instructor completely contradicted what we heard last week at a similar session,” said Evan Beach of Campbell Wealth Management in Alexandria, Virginia.
Nevertheless, there is some consensus as to what you can do now. Below are some early thoughts from wealth managers on strategies taxpayers can start thinking about to avoid unpleasant surprises a year from now:
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- Preview your 2018 taxes.
- Rework your withholding.
- Watch for SALT workarounds.
- Bunch up your donations.
- Home equity loan deductions.
- New college savings plan uses.
- Run your retirement numbers.
- Finally, just breathe.
The author of the article: Suzanne Woolley.
This article was originally published in Bloomberg.
