Ted Bauman did an article just the other day enumerating a dozen legal ways taxpayers can take advantage of the current tax regime to save some money before the new federal income tax laws kick in next year. According to Ted Bauman’s analysis, the new federal income tax system comes as good news for some and not so good news for others. The good news is, at least for the next ten years lower income earners will be subjected to marginally lower tax rates hence reducing a lot of people’s taxes more or less. The second plus goes to owners of pass-through businesses who got a tax reprieve of up to 3%. This essentially means that the owners of such businesses will now be able to deduct up to twenty percent of their earnings from their personal income taxes up from the current 17%. This basically means that if for example, your Limited Liability Company earns $1,000,000 worth of profits then $200,000 of the profits will not be taxed but the remaining $800,000 plus however much you take home as salary will all be taxable.
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The bad news is that the rest of the people will no longer enjoy personal exemption and deductions for SALT will be capped at $10,000. They also put a limit on mortgage interest deductions which will mean that many households, particularly in states with high taxes, will actually end up paying more in taxes. However, there is a raft of measures one can take between now and the end of the year to reduce your federal income tax bill of 2017. These measures are all aimed at maximizing your itemized deductibles now since you won’t be able to deduct them come 2018 and also these measures assume that you anticipate surpassing the $24,000 in itemized deductions in 2018.
Some of the measures include giving more to charity before December 31, prepaying your 2018 property taxes in full, prepaying next year’s mortgage interest, prepaying any outstanding student loans, and also you could consider prepaying for your next year’s medical expenses including a scheduled procedure that you know you might have next year just to mention a few.
Ted Bauman is an experienced financial expert focusing on asset protection, low-risk investment, and emerging privacy matters. He aims at helping people become wealthy while leading a dignified life. He is also the editor of the Bauman Letter and an Editorial Director at Banyan Hill Publishing.
Here’s my Dirty Dozen list of tax steps you can undertake before December 31 to wring the maximum amount away from Uncle Sam before the law changes in 2018.#taxes #IncomeTax #WealthManagement #investing #TaxReform #BanyanHillhttps://t.co/OewfnRsTxM
— Ted Bauman Guru (@Ted_B_Guru) December 18, 2017