Get started on 2018 tax planning now
While we are barely a month removed from this year’s individual income tax filing deadline, it’s not too early to start thinking about next year’s tax strategy. The changes from last year’s Tax Cuts and Jobs Act (TCJA) are now fully in effect for the 2018 tax year. 415 Group Manager Todd Ruggles, CPA, looks at how early planning can provide potential tax benefits.
It makes a good deal of sense to begin looking at next year’s taxes right now, given the sheer volume and potential impact of the changes enacted by last year’s Tax Cuts & Jobs Act. While strategic tax planning has always been important, the process may need to start earlier than in previous tax years. Certainly, every individual’s tax situation has its own set of unique circumstances. However, I expect these new tax law changes to affect a large portion of taxpayers—both positively and negatively.
In that light, it’s much better to understand your potential tax liability now, rather than waiting until the deadline to discover potentially unpleasant surprises. Under the TCJA, the IRS withholding tables have also been modified, making it a great time to find out if your withholding is in line with your expected tax liability.
I think that automatically expecting your individual tax liability to be reduced could be a real mistake. It’s true, the changes in the tax law may present significant benefits to many filers. For example, the modifications in the child tax credit provisions will likely open up this benefit to a wider range of individuals. However, other factors are at play such as the elimination of many itemized deductions. Even the state and local taxes deduction, which was commonly used by many people, has been greatly reduced. The point is when it comes to your taxes—this year especially—early preparation can help you maximize your potential benefits while avoiding tax pitfalls.
At 415 Group, we’ve dedicated substantial time to interpreting the new tax regulations put in place by the TCJA. With these new rules now firmly established, our clients can start playing the “long game” once again. And that’s where we can really help. We have the necessary tools and experience to run tax liability projections that will help you make the most informed tax strategy decisions.