Tax Planning Already?
You just finished filing your taxes or your extension so you breathe a sigh of relief. But don’t relax too long. To get the maximum savings next year, you need to start planning right now. The impact of the Tax Cuts and Jobs Act has greatly changed tax law. So position yourself and your business for the best tax advantages with early planning.
A tremendous number of variables will affect your overall tax liability this year. Review the changes likely to affect you early in the year to take advantage of opportunities to reduce your 2018 tax bill. One example is the timing of income and deductible expenses can affect both the rate you pay and when you pay. By regularly reviewing your year-to-date income, expenses and potential tax, you may be able to time income and expenses in a way that reduces, or at least defers, your tax liability.
We now know, so we can plan
Last year, planning early was a challenge because it was uncertain whether tax reform legislation would be signed into law, when it would go into effect and what it would include. This year, the TCJA tax reform legislation is in place, with most of the provisions affecting individuals in effect for 2018–2025. And additional major tax law changes aren’t expected in 2018.
But while there’s more certainty about the tax law that will be in effect this year and next, there’s still much uncertainty on exactly what the impact of the TCJA changes will be on each taxpayer.
The new law expands some tax breaks and reduces individual tax rates. However, it also reduces or eliminates many other breaks.
So when planning it will be important to examine the total impact of these changes to determine which tax strategies will make sense for you this year, such as the best way to time income and expenses. You may need to deviate from strategies that worked for you in previous years and implement some new ones.
Now and throughout the year
To get started on your 2018 tax planning, contact Eden LaLonde, CPA, MAcc, Ciuni & Panichi, Inc. Tax Department Senior Accountant at 216-831-7171 or by email here. She can help you determine how the TCJA affects you and what strategies you should implement now and throughout the year to minimize your tax liability.
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