The Tax Cuts and Jobs Act of 2017 may potentially impact your personal tax situation, so it’s not too early to start year-end tax planning. Given the changes, here are a few things to consider:
1. REVIEW PAYROLL WITHHOLDINGS
Tax brackets changed to favor many taxpayers, but at the same time, withholding rates also decreased. Review your withholding rates now to avoid surprises in April.
2. CONSIDER A COMPREHENSIVE ESTATE PLAN REVIEW
While the new tax law doubled the threshold for estate taxes (and this doesn’t expire until 2025), it also created new considerations that may impact your existing estate plan.
3. RETHINK CHARITABLE DONATIONS
With the increased standard deduction, many will find there is no longer a need to itemize. Bunching charitable donations allows individuals the opportunity to itemize by grouping donations to charities in specific years and by limiting donations in other years. In addition, individuals over 70.5 may consider making charitable donations up to $100,000 from their annual IRA RMD.
4. CONSIDER PAYING OFF MORTGAGE DEBT
The new standard deductions change the math for many folks, especially married couples.
The team at NNP is ready to help and recommends consulting with your tax advisor before making any changes. Give us a call to start the conversation!