< Back to Thought Leadership

Get Started On 2018 Tax Planning Today!

Now is the time to start tax planning for 2018 for maximum tax savings. It’s especially critical to get an early start this year because the Tax Cuts and Jobs Act (TCJA) has substantially changed the tax environment.

Many Variables

A tremendous number of variables affect your overall tax liability for the year. Looking at these variables early in the year can give you more opportunities to reduce your 2018 tax bill.

For example, the timing of income and deductible expenses can affect both the rate you pay and when you pay. By regularly reviewing your year-to-date income, expenses, and potential tax, you may be able to time income and expenses in a way that reduces, or at least defers, your tax liability.

In other words, tax planning should be a year-round activity.

Certainty vs. Uncertainty

Last year, planning early was a challenge because it was uncertain whether tax reform legislation would be signed into law, when it would go into effect, and what it would include. This year, the TCJA tax reform legislation is in place, with most of the provisions affecting individuals in effect for 2018–2025. Currently, additional major tax law changes aren’t expected in 2018, so there is no need to hold off on tax planning.

But while there’s more certainty about the tax law that will be in effect this year and next, there’s still much uncertainty on exactly what the impact of the TCJA changes will be on each taxpayer. The new law generally reduces individual tax rates, and it expands some tax breaks. However, it also reduces or eliminates many other tax breaks.

The total impact of these changes is what will ultimately determine which tax strategies will make sense for you this year, such as the best way to time income and expenses. You may need to deviate from strategies that worked for you in previous years and implement some new strategies.

Getting started sooner will help ensure you don’t take actions that you think will save taxes but that actually will be costly under the new tax regime. It will also allow you to take full advantage of new tax-saving opportunities.

Now and Throughout the Year

To get started on your 2018 tax planning, contact your local Blue & Co. tax advisor. We can help you determine how the TCJA affects you and what strategies you should implement now and throughout the year to minimize your tax liability.

 

Tax Reform Resource Center

Blue & Co.,LLC - Read more in our Hot Topic Archive! Click Here. Like what you read? Subscribe to our newsletter. Click Here.

 

Related Articles

Donor Gift Receipts – IRS Substantiation Requirements

Donor Gift Receipts: IRS Substantiation Requirements

With the end of the year approaching, many not-for-profits see an increase in giving. Therefore, we thought it would be helpful to provide a brief summary of donors’ documentation requirements for tax-deductible gifts and what not-for-profits can provide to donors to assist in fulfilling these requirements. The Internal Revenue Service has provided documentation requirements for […]

Learn More
Buying Qualifying Business Assets Before Year-End Could Reduce Your Tax Liability

Buying Qualifying Business Assets Before Year-End Could Reduce Your Tax Liability

There is still time to reduce your 2018 tax liability by purchasing qualifying business assets, but you need to act soon! The Tax Cuts and Jobs Act (TCJA) has enhanced two depreciation-related breaks that are popular year-end tax planning tools for businesses. To take advantage of these tax-saving measures, you must purchase qualifying assets and […]

Learn More
Make 2019 NQDC Plan Deferral Elections Now

Make 2019 NQDC Plan Deferral Elections Now

Employers may offer executives or other key employees a nonqualified deferred compensation (NQDC) plan. NQDC plans pay employees in the future for services currently performed. The plans allow deferral of the income tax associated with the compensation. But to receive this attractive tax treatment, NQDC plans must meet many requirements. One is that employees must […]

Learn More