The likely approval of the tax overhaul bill has experts planning for the upcoming tax season now. Omaha CPA Bob Berger says there are some big changes – especially when it comes to deductions.
Berger says, “The state income tax deduction and the property tax deduction, for the most part, are going away. There is a limitation going next year up to $10,000 in 2018 but if you have the opportunity to pre-pay those taxes in 2017, you probably will get a bigger bang for your buck but you always have worry about that alternative minimum tax portion of that to make sure it works for you.”
Berger says the majority of the tax bill will go in to effect in January but several part of the bill gradually. He says lawmakers targeted the difficult areas of tax returns. The dependent areas are going away because there is a standard deduction now. Miscellaneous itemized deductions are going away so tax preparations fees, office in home and employee business expenses disappear. Berger says someone making $73,000 for a family of four will see a tax break of about $2,000 a year.
Berger says this is a very unique tax bill and very exciting. It will be interesting to see what those in the industry can do to save money for their clients.