Biggest Tax Tip for 2017 Filings? You may be Surprised.
The biggest tax tip for 2017 tax filings may come as a surprise. This is because it does not have to do with 2017 taxes. The tax reform passed for 2018 overhauls the system. As a result, the reform could translate to a change in your tax obligations in 2018.
Thus, arguably the biggest benefit while completing 2017 tax filings is to look towards the future. Review tax obligations for 2017 to help determine if you need to make adjustments in 2018.
What types of tax adjustments may be needed in 2018? Take a moment to review your current tax withholdings and project future obligations. A recent piece in the Wall Street Journal provides an online estimation of obligations. The piece notes the majority of taxpayers will see a reduction in their obligations, while a small percentage will see an increase. Get an idea where you stand and adjust withholdings accordingly.
Additional changes may also be wise. Charitable contributions, for example, deserve a review. It may be wise to adjust contributions if they were guided by tax advantages. The tax law that applies to 2018 results in a reduction in the number of taxpayers that benefit from charitable donations.
How will the tax law impact you? The impact of the new tax law will vary for each individual taxpayer. A failure to properly apply the changes can lead to an audit. Those who are the subject of an audit can benefit from legal counsel. An attorney can provide guidance through the audit process and create a barrier between the Internal Revenue Service (IRS) and the taxpayer.
