The 1967 film The Dirty Dozen is now shorthand for twelve disreputable though advantageous things that can done. There is a list published by the IRS of tax scams against the IRS and taxpayers every year. The tax laws change in 2018 and there are some tax steps that can be taken to get the maximum from Uncle Sam before then. All of them are legal.
Good and Bad News for Federal Income Tax
The good is that all income brackets were given a lower marginal tax rate until at least 2027 in the tax plan from the GOP. Most taxes will be reduced at first when everything else is equal. Twenty percent of profits for S corporations, partnerships and limited liability companies (LLCs) can be deducted from personal income taxes. That is a three percent increase from the current seventeen percent. Out of one hundred thousand in profits only eighty thousand will be taxable.
The standard deduction has increased from $12,700 to $24,000 for married couples filing a joint return. This will reduce the amount of people who itemize deductions because the standard deduction will be higher. There are several lower income households that will benefit from the new deduction rate.
Eliminating the personal exemption, capping tax deductions for property (SALT), local and state at ten thousand dollars and limiting the interest deductions for mortgages will cause households to pay more in taxes, especially where the tax rates are higher. There are simple tax moves to maximize itemized deductions for the year to lower the bill for federal income taxes for 2017 because they won’t be deductible in 2018. Itemizing will not be a benefit if you have less than twenty-four thousand dollars in deductions. Prepaying some of the deductible expenses will allow you to benefit one last time. Learn more at Seeking Alpha about Ted Bauman
Ted Bauman joined Banyan Hill Publishing during 2013 and serves as editor for Alpha Stock Alert, Plan B Club and The Bauman Letter. He specializes in strategies for low risk investing, international migration issues, privacy and asset protection. He is constantly looking for safe ways to grow and protect wealth. His mission is to aid you in taking control of your destiny when it comes to finances.