The short answer is: don't.
The Tax Reform bill has passed the House, but it still must get through the Senate. You can depend on Congress as much as you can depend on my 2-year-old. I’ve had several clients come to my office either excited about the potential changes to the tax code or terrified of what it would mean for their finances. Regardless of where you fall on the issue, the fact remains that everything is up in the air.
The best way you can prepare is to make sure you have your house in order.
However, as we come to the end of the calendar year and especially as we get into the excitement of the Holidays, the best way you can prepare is to make sure you have your house in order. You need to make decisions now, no matter what goes on in Congress, to make sure you don’t overpay to the IRS.
For example, I have a client who enjoys giving to charities around the holidays and makes a point to invest in her retirement plan as much as possible. That means we must be strategic with her filing, but it can result in great savings for her. She was unsure how to estimate what she needed to contribute to her retirement savings and consulted her accountant. He told her, “Don’t worry about that now. You don’t have to make these decisions until we file in April.”
Here’s where he’s wrong: it depends on if she has an IRA or 401k. If she has an individual retirement plan, or an IRA, she could contribute until she files in April, giving her some leeway in her planning. Although, she has a group retirement plan, or a 401k, and the last day she can contribute and claim that total towards her tax return is on December 31st. Without consulting our team, she could have lost thousands of dollars in refunds.
Don’t get caught in a situation like this. Make sure you know all the decisions you need to make before 2018. This is how you can best prepare your taxes this season, even with the chaos in Congress. We would love to help. We provide free consultations, which allow us to get a look at your overall situation and ensure you’re capturing all the returns available to you.