Let’s talk a little about Tax Reform and then get into some things you should do this time of year. Tax Reform should overall benefit individuals with lower tax rates and higher standard deductions although specifics are uncertain. It looks like many taxpayers in 2017 will be able to turn sales tax, charitable contributions and employee job expenses into GOLD. I am talking about saving thousands
of dollars in taxes. My Tax Mastery© program identifies these deductions for you and tells you how to get them. Once you have secured these deductions, you can adjust your withholding or estimated tax payments so that you have more take-home pay.
TAX REFORM: Under Tax Reform larger standard deductions will benefit many taxpayers, $24,000 for married taxpayers filing jointly, and $12,000 for single filers. The initial tax reform bill would eliminate itemized deductions other than home mortgage interest and charitable contributions. This means no deductions for medical costs or employee expenses, Fedex pilots. I predict that Congress will keep the deduction for state and local taxes but phase it out for larger incomes.
Tax season is never over. You have to act this time of year to get tax benefits. There are many deductions that you cannot use at all unless you are “Itemizing your deductions.” You can itemize if your Schedule A deductions (medical, tax, mortgage, charitable, employee, and investment) exceed your “standard deduction” ($12,700 for joint and $6,350 for singles). See my TAX SUMMARY_2017.
Once you pass this threshold the effect of these deductions starts to add up.
My advice: Don’t be lazy. Keep records to support your Itemized Deductions. My Tax Mastery© program identifies deductions and tells you what they will save you.
The IRS “gives” you an estimated sales tax deduction from a table, but my experience shows that it is half of what most taxpayers actually spend. So keep receipts for all your sale taxable purchases, especially vehicles or home improvements. The State of Tennessee has a sales tax on just about everything.
For example, one of my favorite clients came in with receipts for over $200,000 for an addition to their house. They saved more than $7,000 in taxes! You don’t have to add up these receipts. Use your credit card and bank statements to estimate a conservative amount. Save the receipts in case you are audited.
Keep receipts for charitable contributions, especially clothing and household items. If you were recently married or moved, don’t keep everything you both owned and don’t tell me you gave only $450 to charities. I can show you how to value and record these items. Use my Charitable Contribution Record.
Miscellaneous Deductions.You cannot deduct Miscellaneous Deductions unless they exceed 2% of your Adjusted Gross Income. With Tax Mastery I can show you the additional employment and investment deductions. Are you missing investment fees hidden at the back of your investment adviser’s statements?
Once we find and get proof of all of these deductions, it is Christmas time! Want some tax free cash? I can show you how to adjust your federal withholding so you take home those tax savings between now and the end of the year in the form of more take-home pay.