Financial Planning | December 11, 2018
At the end of 2017, the Tax Cuts and Jobs Act was signed into law. This law made significant changes to our tax code that changed or eliminated many deductions and changed the landscape of tax planning opportunities. As we near year-end, it is important to understand which planning opportunities changed, which techniques were eliminated, and to discover the new strategies that may be available to you.
Below is a summary of the key changes that most affect taxpayers and some helpful year-end tax planning tips. If you have any questions, we encourage you to contact your GW & Wade Counselor or you can reach us at email@example.com.
For all taxpayers over 70 ½, make sure you have taken all required distributions from your retirement accounts. A failure to do so could result in significant penalties.
If you contributed to an FSA during the year, and your plan runs on a calendar year, be sure to generate enough expenses by the end of the year so that you spend the entire account. Any money that is contributed but not spend by year-end will be forfeited.
Review and ensure that you are contributing as much as feasible to your retirement plan. For company sponsored 401(k) plans, contributions must be made by 12/31 to qualify as a deduction for 2018.
Under the new tax law, you are allowed to use up to $10,000 per year from a 529 plan to pay for private K-12 tuition. If you have a 529 plan and paid for private elementary or high school tuition during the year, you may consider using a 529 plan to cover most of that expense. Check with your advisor to determine the specific details of your state’s plan. Not all states automatically follow the federal definition for their 529 laws.
For more information, view our recent 529 Plan blog.
If you are self-employed, a partner in a partnership, or an S-Corp shareholder, you may qualify for the new deduction equal to 20% of the income from these entities. Your allowable deduction is based on your total income from the year, so a complete review of your total tax situation must be reviewed to determine if you can qualify for this deduction.
Almost everything in life involves taxes: if you got married, had a child, bought/sold a home, etc., you should consult with an advisor to consider the tax impact.
Again, if you have any questions, we encourage you to contact your GW & Wade Counselor or you can reach us at firstname.lastname@example.org. We welcome the opportunity to help you achieve your long-term financial goals.
The information above is general and educational in nature and should not be considered legal or tax advice. Tax laws and regulations are complex and subject to change. GW & Wade cannot guarantee that this information is accurate, complete, or timely. We make no warranties with regard to such information or results obtained by its use. Always consult an attorney or tax professional regarding your specific situation.
Clients of the firm who have specific questions should contact the GW & Wade Counselor with whom they regularly work. All other inquiries, including any inquiry concerning a potential advisory relationship with GW & Wade, should be directed to:
Laurie Wexler Gerber, Client Development Manager
GW & Wade, LLC
GW & WADE ADVISOR