Starting early on your 2018 tax planning is especially critical this year, as tax reform has substantially changed the tax environment. Tax planning helps determine the total impact new laws may have on your particular scenario and identifies proactive tax strategies that make sense for you this year, such as the best way to time income and expenses. From this analysis, you may decide to deviate from tax approaches that worked for you in previous years and implement a new game plan.
A tremendous number of variables affect your overall tax liability for the year. For example, the timing of income and deductible expenses can affect both the rate you pay and when you pay. By reviewing your year-to-date income, expenses and potential tax, you may be able to time income and expenses in a way that reduces, or at least defers, your tax liability.
Under the TCJA tax reform legislation, most of the provisions affecting individuals are in effect for 2018–2025 and additional major tax law changes are not expected in 2018.
Starting sooner will help prevent you from making costly assumptions under the new tax regime. It will also allow you to take full advantage of new tax-saving opportunities.
A large number of variables affect your overall tax liability for the year. It is especially critical this year because tax reform has substantially changed the tax environment. Planning early in the year can give you more opportunities to reduce your 2018 tax bill.
If you own a business, this is particularly important for the new qualified business income (QBI). New strategies are available to help you time income and expenses to minimize tax liability.
Now and throughout the year, seek your business adviser to help you determine how tax reform affects you and what strategies you should implement to minimize your tax liability.