Tax Planning TimeWritten by Dorsey Packard
CPA Packard and Associates Minier IL
Now is the ideal time to schedule a tax planning session. Your 2017 tax return outcome is still fresh, and it's early enough in the year to take advantage of the numerous tax law changes taking place in 2018. Here's a brief overview of some of the new tax issues that you need to plan for now.
• Income. Tax rates for both individuals and small businesses have changed substantially. Income tax deductions have also changed drastically, including a nearly doubling of the standard deduction and elimination of personal exemptions and miscellaneous itemized deductions.
It's important to review your income tax withholding schedule to see where you fall in the new income tax bracket structure. Small adjustments here could save you hundreds.
• Bunching. Because of the changes to the deductions structure, using itemized deductions may now require bunching two or even three years of expenses into one tax year. Things like donations to charity and medical expenses that you may have spread across several years are now better bunched into a single year to maximize your tax savings.
If you typically take care of medical expenses or charitable donations at a regular time every year, hold off this year until you have a new tax-efficient plan.