The “Tax Cuts and Jobs Act” (H.R. 1) passed Congress on December 20, 2017. The President signed the tax bill into law on December 22, 2017, which means tax reform is in full effect. With 2018 upon us and these new changes approved into law, there is little time to engage in some 2017 year-end tax planning. Here are a few initial observations:
- Pay state income taxes and property taxes for 2017 by December 31, 2017.
- Pay miscellaneous deductions, such as tax preparation fees and eligible investment expenses by December 31, 2017.
- Pay any moving expenses by December 31, 2017.
- Pay any charitable contributions to a college by December 31, 2017 if it is part of a season ticket package.
- Accelerate deductions into 2017; tax rates under the tax bill are scheduled to drop in 2018. This could apply for businesses as well as for individuals.
- Defer recognition of income to 2018, again as tax rates are scheduled to be lower in 2018. This too could also apply for businesses and individuals.
- Other projects, such as possible adoption or change of entity status (from say, S Corporation to C Corporation status, or vice versa) would involve a more in-depth analysis as there are many factors to address.
- Consult your local Sikich tax advisor to stay on top of your year-end tax planning.
These are general observations. The actual planning can vary by taxpayer based on their situation, the assumptions used, and many other factors. We can assist you with any 2017 year-end tax planning, as well as other analysis of the new tax law as we move into 2018. If you are interested in any assistance in tax planning for 2017, or other tax planning or analysis, please contact us.