The New Tax Law – How do you handle things now?
With today’s passing of the new tax law I have been asked by several clients if this is generally good or bad with the obvious next question of how will this affect them.
I won’t answer the first question because it will be different for everyone, and you will fall into one of the three scenarios;
- It’s good for you
- It’s bad for you
- It really doesn’t change things much
The purpose of this blog/email though is to tell you how you should handle things over the coming months involving tax preparation and tax planning. Remember your 2017 return will not be affected.
Step 1. Tax Prep - January thru April – Prepare your 2017 tax return
Step 2. Tax Planning - Prepare an estimated 2018 return using figures from your 2017 return with the new tax laws and tax rates applied to see how the changes will affect you precisely.
Step 3. Tax Planning – While looking at the new law see what can be done to take advantage of all the changes in store, whether you are a business owner or not there may be things you can do.
The most IMPORTANT THING TO KNOW now is the withholding tables change so less will be withheld from paychecks starting by February (my understanding), so it is vital to take a proactive approach with steps 2 and 3 above to see if your withholding or estimated payments should be adjusted to avoid any unpleasant surprises when 2019 comes along and we are filing returns for 2018. A nice little extra cash starting in February may come back to haunt you a year from then.
As a reminder we are here to help with any and all of the steps above and will be proactive in discussing and assisting you with the steps ahead.