With Trump, tax changes possible, so do these things now
Susan Tompor , Detroit Free Press Personal Finance Columnist 11:19 p.m. EST November 30, 2016
- There are several quotes from our Managing Member Darren Neuschwander, CPA. Excerpts:…As a result, Darren L. Neuschwander, a certified public accountant and managing member for Green, Neuschwander & Manning, a virtual CPA firm with CPAs across the country, said he would advise some homeowners to consider paying their winter tax bills in December, instead of dragging the payment into 2017.Why? There’s a chance that the deduction for state and local taxes, including real estate taxes, could be reduced or eliminated as part of overall tax reform.
- If you’re subject to the alternative minimum tax (AMT), however, your property tax deduction can be disallowed under AMT rules, so you wouldn’t benefit from paying those real estate taxes earlier.Neuschwander, a CPA based in Alabama, said some people, depending on their tax brackets, may want to consider making additional charitable contributions by Dec. 31 with the thought of possible changes in the tax rules, as well. The thinking is that Congress could pass legislation to drive tax rates lower in 2017, so a deduction could be worth more on a 2016 return….
- Neuschwander also notes that investors want to pay attention to the “wash sale” rules if they plan to buy more shares soon. If you sell a security at a loss and buy the same or a “substantially identical” security within 30 calendar days before or after the sale, the loss is typically disallowed for current income tax purposes. So selling ABC stock on Dec. 28 and buying ABC stock on Jan. 5 means you’re not getting the tax break for 2016. The loss could be deferred into future years. See IRS Publication 550.