Wouldn’t you like to know about early year-end tax planning to take advantage of possible tax reform?
So, why do we think early tax planning is appropriate this year? Actually, with the prospect of major tax reform on the horizon, some strategies can be put into place before the end of the year that can substantially reduce your 2017 tax bill. That would be nice.
While there are several updates and changes that Congress has enacted, this post deals with Itemized Deductions on Schedule A.
If you elect to itemize your allowable personal deduction items on Schedule A then there are a few deductions that have been extended for 2013 and scheduled to expire at the end of 2013. One item is the sales tax deduction for those taxpayers who do not pay any or little state income taxes. Therefore, based on Tables established by the IRS you may be able to deduct the sales taxes paid on your consumption of goods and services. In addition to the Standard Table amounts you can also deduct the sales tax paid or incurred on big ticket items such as automobiles, boats, building materials, etc. You will need to have your receipts in order to deduct and verify the sales tax deduction. Contact us for more information.
The other Schedule A itemized deduction that is extended and scheduled for expiration after 2013 is the deduction for Mortgage Insurance Premiums (PMI). If you have a mortgage and are paying PMI then you could be eligible for this deduction. The deduction does have a phase-out provision once your Adjusted Gross Income (AGI) reaches $100,000. It is completely phased out when your AGI reaches $110,000. If you fall into this category, it’s an opportunity worth further discussion with us.
Other changes enacted by Congress will be covered in subsequent posts.
Disclaimer: This publication/blog, which may be considered advertising under the ethical rules of certain jurisdictions, is provided with the understanding that it does not constitute the rendering of legal advice or other professional advice by Joseph J. Cahill / Worthtax or any of its subsidiaries or its attorneys, employees or associates representing Joseph J. Cahill / Worthtax. Additionally, the foregoing discussion does not constitute tax advice. Any discussion of tax matters contained in this publication/blog is not intended or written to be used, and cannot be used, for the purpose of avoiding penalties under the Internal Revenue Code or promoting, marketing or recommending to another party any transaction or matter.
Joseph Cahill & Associates / WorthTax is proud to offer income tax preparation services to the residents of Norwell, Scituate, Hingham, Hanover, Pembroke, Marshifield, Hanson, Plymouth, Quincy, Braintree, Milton, Weymouth, South Weymouth, Hingham, Rockland, Abington, Holbrook, Canton, Dedham, West Roxbury, Hyde Park, Westwood, Norwood, Walpole, Needham, and other surrounding communities.