Tax Reform Year-end Tips

Here are a few tips and to-dos prior to December 31:

• Prepay any 2017 state income taxes.
• Pay or prepay Property Tax by December 31.
• Make charitable contributions before December 31.
• Accelerate any of your children’s unearned income into 2017 (rates go up in 2018).
• Defer business income to 2018 (rates go down in 2018, plus deduction)
• Cash-basis taxpayers should pay for business expenses before December 31. 
• Buy and place in service an electric car (tax credit expires at end of 2017).
• Recognize any possible business losses (they will be limited in 2018).
• Prepay investment expenses and tax prep fees in 2017 (nondeductible in 2018).
• Pay any moving expenses related to a job in 2017 (the deduction is eliminated in 2018).
• Sell any business processes or patents before the end of the year (this will be treated as ordinary income in 2018, and is capital gains in 2017).
• Wait to buy a business vehicle until 2018 (depreciation on luxury autos goes up substantially in 2018).

These tips are general in nature and should not be relied upon as professional advice. You are encouraged to discuss these matters with a professional prior to actions that may affect your tax returns.