Top 3 Ways to Hack the Tax Cuts and Jobs Act
- Update your W-4
Taxpayers can no longer claim a personal exemption. Make sure you have proper wage withholding. If you enjoy getting a refund when you file taxes, and you don’t want to owe, you will likely need to update your W-4
- Get the medical procedure you’ve been putting off done in 2018
The AGI floor for itemizing medical deductions is now 7.5% instead of the previous 10%. In other words, if you pay more than 7.5% of your AGI on medical expenses, you will be able to deduct them.
- Bunch your charitable contributions
The standard deduction has nearly doubled. If you are close to being able to itemize deductions, you may want to consider bunching your charitable contributions in one year.
For example, if you normally make charitable contributions of $10,000 per year, you may want to consider making $30,000 in charitable contributions in one year and itemizing deductions, and taking the standard deduction in the next two years.
Remember, many of these provisions are set to expire after 2025. It is important to stay on top of the tax law changes to make sure you are compliant while also using the tax laws to your favor.
If you have questions about the new tax laws and how they affect you, you should reach out to a tax lawyer who can assist you with your questions and concerns.
Mendes Weed, LLP is here to help you if you have any questions. (925) 390-3222.
The tips and materials provided on this page are for informational purposes only, offered as public service. No information on this website should be considered legal advice or used as a substitute for legal advice. For legal advice, you should contact an attorney directly.