By John Foley, CFP®
As you’ve no doubt read in the news, the Tax Cuts and Jobs Act of 2017 is about to become law. And while the bill contains over 500 pages of changes to the tax rules for corporations, privately held businesses, and individuals, what you’re probably wondering most is: How will the tax plan affect me?
There are three big changes in the Tax Cuts and Jobs Act that will impact most individual taxpayers:
1) New income tax brackets with lower rates for most taxpayers
2) A higher standard deduction—$12,000 for single filers, $24,000 for married filing joint
3) A $10,000 limit on the combined deduction for state and local income and property tax (and that’s the same whether you’re single or married)
While you can’t change the rules, there are things you might be able to do to potentially lower your overall tax burden this year and next, namely, shifting certain deductions into 2017 and certain income into 2018. But the clock is ticking: These provisions are expected to go into effect on January 1, 2018, so December 31 is the last day you can do anything that impacts your 2017 taxes.
Here are a few important actions you could take before the new tax bill kicks in. Ask your tax preparer if they are right for you.