The income tax Bill made progress through Congress this week to make serious changes in the formula to calculate your federal income taxes. Many of these changes will have a negative impact on your income taxes. The Bill is not guaranteed to pass; but, if it is passed, it will not be passed until the joint conference between the House and the Senate hash-out their differences. These differences are significant, and we cannot forecast how they will be reconciled.
The timeline, according to our estimate, indicates we will not see the results of the House/Senate conference until December 15th. That leaves only 2 weeks to react, to figure out how it affects you, and to take advantage of year-end tax planning opportunities. For example, some experts predict 90% of taxpayers will not itemize after 2017 if the Bill passes-this means 2017 could be the last year 90% of taxpayers can deduct charitable contributions (those affected taxpayers should consider prepaying 2018 and 2019 charitable contributions before 12/31/17). We will not know for sure which of these strategies are right for you until about 12/15/17.
The Weekly Commentary will continue to report on this time critical topic as it is finalized.