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2017 Year End Tax Planning Tips

Narelle MacKenzie was interviewed by San Diego’s KUSI 9 on year end tax planning tips in light of tax reform. Some of the items discussed were:

  • Deferring or accelerating income depending upon your expected tax rate for the year
  • Accelerating deductions for state income taxes since there will be no deduction in 2018
  • Accelerating your itemized deductions such as charitable contributions if you will be claiming the standard deduction next year
  • Accelerating alimony payments since under the House version of the tax reform bill there will be no income tax deduction in 2018.

She did not have time to cover the changes in the deductibility of mortgage interest, however it’s important to note that there will no deduction for interest on equity lines of credit; even if you are able to itemize your deductions. Please consult with your local CPA on your optimal year end tax planning.

There are also significant changes in the international tax area. Including potential US tax for foreign partners upon the sale of their interest US partnerships. Also an opportunity to rethink the location of Intellectual Partnership (IP”) and possibly migrating the IP back to the USA for a low effective tax rate. Additionally, even if your foreign operations did not throw off subpart F income, any accumulated earnings in your foreign corporations (if they are CFCs) will result in an income inclusion and US tax, based on the balance at January 1, 2018.

Please feel free to contact your CPA or Narelle MacKenzie for additional insights.

Additional Resources

Year End Tax Planning Tips – 2017

Unreimbursed Employee Expenses

2018 Tax Rate Tables – better or worse

Scott2017 Year End Tax Planning Tips