2017 Year-end strategies will become clearer over the coming days as provisions in the Trump/GOP’s tax plan are negotiated for final passage. In the meantime, savvy taxpayers looking to minimize tax liability may want to start with the basics. That is to consider personal circumstances that changed during 2017 as well as what may change in 2018. These are called life cycle changes.
Changes in your personal and financial circumstances – marriage, divorce, a newborn, a change in employment, casualty losses, retirement, large inheritance, investment and business successes and downturns – should all be noted for possible consideration as part of overall year-end tax planning. A newborn, for example, may not only entitle the proud parents to a dependency exemption, but also a child tax credit and possible child care credit as well. Also, as with any life-cycle change, your tax return for this year may look entirely different from what it looked like for 2016. Accounting for that difference now, before year-end 2017 closes, should be an integral part of your year-end planning.
Keep in mind that everyone’s tax situation is different, and tax rules can be complex. These tax tips has been prepared for informational purposes only and should not be relied on for tax, legal or accounting advice.