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Chance for Tax Reform is Better Next Year

| April 03, 2017

The infamous Kiplinger Tax Letter stated in their March 24th edition that the odds of tax reform this year have “ebbed.” We expect to see a draft of a legislative bill sometime this summer. But that’s only the beginning of the process…most likely time frame in the first half of 2018.

What does this mean for you? It is 2016 all over again! This means buckle in and be ready to find every deduction you can this year. Just imagine if tax reform lowers your tax bracket by only 10%. This means if you wait to take a $100,000 deduction next year, it would cost you $10,000. You may think this sounds bad, but if Trump gets his current tax reform plan passed, that loss will be even higher. The good news is that deductions don’t always mean spending money. In fact, there are a lot of deductions that allow you to not only keep, but potentially grow your money.

Here are 7 of them…

  1. Retirement Contributions (Did you know you can contribute and deduct up to $215,000 in 2017?)
  2. Health Savings Accounts (Did you know this is one of the few places you may NEVER pay taxes on your money?)
  3. Energy Investments (Did you know Section 263 of the tax code allows deductions of 100% of intangible expenditures of drilling, which is usually 65-80% of the cost of the well? Then, there is another bonus of 100% of tangible drilling costs which can be deducted as depreciation over a seven-year period.)
  4. Your Own Insurance Company (Did you know you can potentially form your own insurance company and deduct all of the premiums you send there?)
  5. Health Reimbursement Arrangements or Medical Reimbursement Plans (Did you know you could potentially deduct ever over-the-counter medicine, bandage, insurance premium or other health costs no matter how big or little without it having to exceed 10% of your AGI?)
  6. Your Business, Farm, or Ranch (Did you know you could potentially rent your own home to your business and not pay taxes or write-off almost every golf game you play?) It is all about the documentation.
  7. Rearrange Normal Expenses (Did you know you can send your Required Minimum Distribution from your IRA directly to a non-profit and it will never even showing up on your tax return?)

There is just one thing you need to know: As the year progresses, these opportunities begin to - one by one - disappear. Don’t let Uncle Sam stick you with another 2016 tax bill. Let us help you only pay the taxes you really owe!

*Please be advised we are not tax or legal professionals. None of these strategies are recommendations. Any strategies looking to be implemented should be discussed with your tax and/or legal professional.