New year, new tax code. Late last week, President Trump signed a bill overhauling the tax system. It goes into effect beginning next Monday, January 1st. Many people are still scrambling to determine how it affects them. You definitely need to talk to your tax attorney, CPA, or financial adviser to see what impact the changes will have on you. Even though we have less than a week before 2018 begins, there are still things you can do now that could save you money on your 2017 Westfield taxes.
Ways to Save Money on Your 2017 Westfield Taxes Now
Pay January’s Mortgage Today
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One of the quickest ways to positively affect your 2017 Westfield taxes is to make an extra mortgage payment this month. The standard deduction doubles beginning January 1st, 2018. If you itemize, this may cost you. By paying January’s mortgage payment before January 1st, the mortgage interest on that payment can be deducted on your 2017 taxes.
Ditto for Property Taxes
Again, those Westfield homeowners who itemize may want to pay their 2018 property taxes before the year is up as well. The new cap for state and local taxes will be just $10,000. In the Westfield real estate market, this one might hurt. Until December 31, 2017, there is no cap. So, paying your 2018 property taxes now allows you to take the full deduction (if you typically pay more than $10,000 in State and Local Taxes each year). Do you have your property taxes paid out of your escrow account? Talk to your mortgage company. Tell them that you plan on paying your property taxes early. That way, no confusion is created and you don’t get “double tapped” for taxes you’ve already paid.
Defer Bonuses or Last Paycheck of the Year Until January 1st
Another thing you can do to change the impact on your 2017 Westfield taxes now is by delaying end-of-year income. Some Westfield households may end up in a lower tax bracket next year. That means more money in your pocket every paycheck. If you’re expecting an end-of-year bonus or still have one more paycheck left before the new year begins, see if it can wait until after the first of the year.
It’s Always Good to be Extra Charitable
Yet another way to change your 2017 Westfield taxes is to give even more to the local charities you believe in. Your church, Salvation Army, Homeless Animal Rescue, and women’s shelters depend on generous donors such as yourself to continue their work.
Maximize Your Contributions
While these limits won’t change with the new tax bill, it’s always smart to make sure you are contributing the maximum you can to your 401(k), Roth or IRA accounts. If you’re still behind, now’s the time to catch up.
Now, I am not a licensed CPA or practicing tax attorney. You need to talk to them to make sure that you are taking all the steps necessary to be ready for the new tax code. Here’s to a happy and prosperous new year!
Scott Gleason, CRS at RE/MAX Select, Luxury Homes