Every year, millions of the Americans make the strategies to save few bucks from their April tax bills. With Congressional Republicans poised to pass a 503-page law that fundamentally restructures the U.S. tax code, millions of other Americans should be able to get into the act. If this new bill passes, the updated tax rates and a plethora of other provisions would go into effect on the first day of the upcoming year. Most of the old rules would be still applicable in the last two weeks for this year. This is giving the tax payers a shrinking window of time to implement strategies that would minimize their taxes for the upcoming year’s tax season (However the legislation would be in effect from the New Year, it will not be shown in your tax forms until the tax season of the year 2019).
To make the most of this opportunity, we have provided some suggestions from the experts in the industry. While following these suggestions, just remember that the best advice depends particularly on how the new tax bill is going to affect you. With this new tax bill, most of the tax payers will get an advantage, while others have to pay a higher tax bill in 2018. If you are among those who will see an initial tax advantage from this new law, there could many things to take advantage from.
Donate to charity
A typical piece of advice for the making the strategy is to boost up your potential deductions before January 1, 2018. This is because the deductions claimed for current year things will lower the tax bills. Wait till the first month of the New Year and you will need to cool your heels for more than one year to take the advantage of the deductions claimed.
Increasing your donations to the charitable trusts would do wonders for you. If your tax rate is depreciating in the upcoming year then your deductions are worth if claimed against this year’s income. By donating more to the charity, a tax deduction, which is preserved under the tax bill, is a profitable way to increase your 2017 deductions on short notice.
Those expecting their tax rate going up in the upcoming year under the new bill can still make a bunch of charitable donations in the days left for this year. That’s because most of the deductions, including this one can only be claimed if you itemize your tax return. The bill would control the number of taxpayers who can take advantage from itemizing.
So, according to the Philip “Rusty” Ross (a financial adviser at Exencial Wealth Advisors based in Oklahoma City) you can consider making a huge sum of donation in the charitable trust this month if you can afford it. If you don’t have enough time to consider which charitable trust to go with, then you can also open a donor-advised fund and decide about it later. Think over it and take action quickly as there are few days left for this year to end!
Another great way of saving huge while paying tax is by deferring income. This would not work in case of salaried workers as they cannot select the time when they get paid. However, to lower the April tax bill in the process, business owners can take the full advantage of this way by delaying registering income until the following year. Similarly, investors can also limit their taxable income, which will ultimately help them lower capital gains tax bills. Mostly, this deferring income only delays the taxes you have to pay eventually. By opting deferring income, you can actually save huge in your 2018 taxes.
The present tax law permits employees to deduct unreimbursed expenses (tools and supplies, occupational taxes, work uniforms, union dues, and expenses for work-related travel) associated with their jobs provided they are not more than 2% of income. The tax bill ends these itemized deductions after 2017. So, according to the Kathy Pickering, executive director of the Tax Institute at H&R Block in Kansas City, Missouri, the employees should give a though over whether they can pay and get the receipts for most of these expenses as possible this month.
Hire a Tax prepare wisely
After January 1, the individual taxpayers will not be able to deduct tax preparation fees, which mean any payment to the tax software companies and accountants in 2017, should still be deductible on tax returns filed in April. So, it is better to purchase a tax software package now or try to book an appointment with your CPA before 2017 ends. Just remember that the unreimbursed employees expenses (some of which have been mentioned in the aforementioned point), tax preparation fees are deductions that are worth only if you itemize and the total misc. deductions are more than 2% of your total income.
Pay for your expenses
Under the new tax law, you cannot deduct work-related moving expenses after January 1 (exception for the military personnel). It may be cumbersome to schedule a cross-country move on such short notice. But, if you are not planning so, remember to clear up any moving-related expenses by the end of this year.
Maria Williams is a passionate writer who loves to write on the latest technological updates, new product launches, accounting software, tax preparation software and more. While writing, she mainly focuses on delivering the accurate information to her readers.
Source : http://help-number.com/blog/five-ways-to-deal-with-the-new-tax-bill/