2018 Income Tax Projections
Proactive income tax planning is essential for 2018 due to federal tax law changes. As we approach the end of the second quarter, you should calculate your estimated tax liability and take steps to maximize tax efficiency. While the new law reduced income tax rates, doubled the standard deduction and eliminated the alternative minimum tax for many taxpayers, it also limited state and local tax (SALT) deductions to $10,000, eliminated personal exemptions and 2% miscellaneous itemized deductions and potentially increased the tax bill for many residents of New Jersey, New York and Connecticut. Since the recent workarounds to the SALT limitation enacted by these states may be challenged by the I.R.S. in upcoming regulations, it is essential to run pro-forma calculations for 2018 to gauge the impact of various reporting positions. Business owners in particular have a unique opportunity to maximize tax efficiency by analyzing their entity structures and operations and taking immediate steps to plan for the 20% qualified business income deduction. You should not wait until year-end or you could miss out on tax planning opportunities.
Contact my associate Jeff Monteiro @ [email protected] if you would like to schedule a conversation to talk more about which tax or retirement strategy is best for you.
DISCLAIMER: This memorandum was produced by Summit Financial Resources, Inc., which provides financial planning services. Securities and investment advisory services are offered through Summit Equities, Inc., Member FINRA/SIPC. 4 Campus Drive, Parsippany, New Jersey 07054. Phone: 973-285- 3600, Fax: 973-285-3666. This memorandum is for your information and guidance and is not intended as legal or tax advice. Legal and/or tax counsel should be consulted before any action is taken. 20180622-597