Start Planning Now for a Bigger Tax Refund
People have asked: “Will the Republican tax plan affect me this year?” and “What can I do to reduce my taxes?”
The short answer to the first question is no, the Republican plan will not affect your 2017 tax filing and there are no plans to make the act retroactive. If a version of the Tax Cuts and Jobs Act does become law by year’s end, under the House version most of the provisions would take effect Jan. 1, 2018, and be reported on your 2019 return, while the Senate version would go into effect on Jan. 1, 2019, and be reported on your return in 2020.
To answer the second question, you can reduce your taxes for the 2017 tax year by following through on your year-end tax reduction plan based on the current laws — continuing to deduct such items as your state income or sales taxes, property taxes, mortgage interest and charitable contributions, and by taking the dependent deduction.
If you are new to tax planning, some simple strategies to reduce your tax liability include making a charitable contribution to your favorite charity, increasing contributions to your retirement account, prepaying your property taxes, doubling down on your mortgage interest, accelerating your medical and dental expenses, and taking advantage of the annual gift tax exclusion on gift and/or estate taxes. You can also consider giving gifts through a 529 education plan to help save for college. The tax code allows up to five years of gift tax exclusions in a single year, which is as much as $70,000 per recipient or $140,000 per recipient for married couples.
Plan to file for the refundable federal earned income tax credit of up to $6,500 if you earned less than $56,000 — even if you are not required to file because you do not meet the minimum income requirements to file. Every year, $1.8 billion in federal refunds go unclaimed, and upwards of $100 million in state refunds go unclaimed and are deposited into the state general fund. Last year my office helped seniors and qualified working families claim upwards of $14 million in tax credits, and we will continue to support the program this year.
California Board of Equalization
Not Buying It
Re: “The Willy Wonka of Retail: Ron Robinson wants to make shopping fun again,” Cover Story, Nov. 22
How is that not just a two-page advertisement?
Wayne Johnson, PhD