Personal Tax Decisions Before .the New Year

[airboy]

I've been searching and reading as much as possible about what, if any decisions individuals should make before January 1 due to the new US tax bill comes into effect.  After much searching, I've finally been able to nail this down.

Step 1 - Did you itemize your taxes in 2016?  If you did not, don't worry about doing anything.

Step 2 - If you itemized your taxes in 2016, go to your Schedule A.  Check carefully to see how much you were able to itemize.  Be sure to see:
a] Did your itemized deductions exceed $24,000 or were close to $24,000?
b] Did your deductions for property taxes and State/Local taxes exceed $10,000?

If either a or b is a yes, then you need to carefully consider if you can prepay as much of your State/Local/Property taxes before the end of the year.
You also should consider if you should make charitable deductions now that you were planning to make in 2017 

I do not recommend changing the structure of businesses you own from a partnership to a corporation until the tax regs come out.  There is a lot of complexity in this decision and I would wait and see how the chips fall on this.

Next, if you plan to do any regular IRA conversions to a Roth IRA, I would probably do those before the end of the year.

Finally, given how the markets have done over the last year, making charitable contributions with appreciated securities is also something to think about.


For everyone else who is actually paying US Federal Taxes, you will get a tax cut and it will show up in your paycheck (if you work for someone else) in February.


Hope that those of you who fall under these categories find this helpful. 

[Jarhead0331]

Good information. For your own protection and for the protection of grogheads, it should be clear to all that nothing posted in our forums constitutes financial, tax or legal advice and all posted material and comments are for informational purposes only.

[Staggerwing]

Does that mean I have to add a disclaimer to my planned posts on mixed roadflare-and-rattlesnake juggling for fun and profit?

[GDS_Starfury]

What about profits from pimping Gus?

[mirth]

What about profits from pimping Gus?

Use the Short Form.

[GDS_Starfury]

Did we actually make money after all the penicillin shots?

[mirth]

Those should be deductible

[GDS_Starfury]

if any more gets deducted from Gus he'll be 6" tall standing up.

[mirth]

We need Airboy to explain the implications of the tax bill on gimps.