The deadline for tax season is just over a month away. If you are preparing your taxes, you are probably trying to think of the best ways to cut down on the amount that you owe the IRS. You’re not the only one: According to a recent survey from the American Institute of Certified Public Accountants, 63 percent of affluent taxpayers are looking for ways to adjust their financial planning strategies.
How you file your taxes can play a major impact on your finances for the year to come. These are three strategies that you may wish to use to reduce your taxes from 2017.
Pay your home equity loan
Last year, the Trump administration passed a massive tax overhaul that has significant changes for homeowners. You will no longer be able to deduct the interest that you pay on your home equity loan. There is no longer a tax incentive to have your home equity loan on your balance. Paying off as much of your home equity loan as soon as possible makes the most sense for your taxes in the future.
The benefits of bunching
You will now have to itemize your charitable deductions if you want to count them toward your taxes. One strategy to deal with this is to bunch your charitable contributions. Bunching your contributions means that you aggregate several years’ worth of charitable donations into one tax year. It is a strategy that can help taxpayers get over the standard deduction to itemize their charitable donations.
New deductions for business owners
There is a new tax deduction for qualified business owners. If you own a pass-through entity like an S corporation or an LLC, you may be able to deduct 20 percent against your qualified business income. There are certain limits on who may qualify for this deduction: If you own a service business, your income is below $157,500 if you are single or $315,000 if you are married or you own a service business, you may not qualify.
Are you ready to take the first step toward reaching your goals?
Contact us today to schedule a Initial Consultation with our Toledo, Ohio, attorneys.