Hoping all of you have had a wonderful Christmas and holiday season. I've been hard at work for the past couple days trying to make sense of the new tax code coming next year after President Trump signed the tax cut bill on the 22nd. I'm writing quickly today to give a quick alert. In the next year ahead, I'll be blogging a lot on the new tax law implications on estates and businesses as well as giving more tidbits to help you guys out. New and Present homeowners...here is the tip for you.
Currently for Tax Year 2017 (which is about to be done) you are able to deduct all your State and Local Taxes (we call this the SALT deduction).
Unfortunately for 2018, the new tax cut bill caps the SALT deduction amount at $10,000. You can only deduct $10,000. It sucks. Especially since we live in the very high tax Tri-State area of NY and/or NJ. Here's how you can possibly prepare around that.
1. Contact your local municipality and ask if you can prepay your property taxes for next year. You can deduct it this year. Some municipalities aren't doing that, so make sure you call and ask!
2. Contact your attorney, CPA, or tax preparer and talk to them about strategies to mitigate this new tax impact. It will be easier to plan for 2019 going forward, but since 2018 is a new code transition year, it's all hands on deck. Your professional advisors are probably getting swamped with calls right now. That's okay! We're here for you!
3. Act before close of business day Friday Dec. 29 because you'll need proof of that receipt from your municipality.
That's all. Hope this helps with taxes for the next year. If you have any questions feel free to bug me.