Start to Plan Your 2018 Tax Return

taxes

taxesFor some of us, it was only three months ago that we scrambled to get our tax documents to an accountant or tax preparer. “Think ahead,” may not be the advice we want to hear about 2018 taxes when the deadline for those returns is still eight months away. But wait a minute!  Now is the time, especially if you are in some special situations.
For 2018, the standard advice about saving receipts for medical expenses, mortgage interest payments, local taxes, charitable deductions and other deductible outlays still applies, but there is a big catch, and you should think about this in your tax planning.  Last year, the Congress passed and President Trump signed the “Tax Cuts and Jobs Act of 2017,” a law that can substantially change tax planning for some people.
That law significantly raised the standard deduction that many taxpayers were taking, and by doing so made itemizing deductible expenses less attractive for many. The bottom line is this: for many people, it will no longer make sense to itemize deductions.
For a taxpayer filing as a single person, the standard deduction is now $12,000 ($13,600 for seniors 65+) For couples who are married and filing jointly, the figure is $24,000 (add $1,300 for each spouse 65+). This means that couples who are both 65+ get a standard deduction of $26,600. These standard deduction amounts are nearly double the old ones.
The IRS expects that the percentage of taxpayers who itemize deductions will fall from 30% to just 10%. It means that for many people, the tax advantage of mortgage interest payments, paying local or state taxes in a high-tax state or even making charitable donations will end. For example, let’s say that a married couple, both 65+ pays $10,000 in mortgage interest, makes $5,000 in charitable contributions, and pays $5,000 in state and local taxes. This adds up to $20,000 in deductions, making itemizing sensible under the old system. In 2018, it is not!
This could make home mortgage loans, living or owning property in a high-tax state and giving to tax-deductible causes more expensive. The costs will no longer be partially offset by tax deductions. How this affects individual decisions about buying or selling real estate, giving to schools, churches and non-profits and other deductible expenses will depend on your total tax picture.
For lower income seniors, there may be another set of decisions: whether to file a tax return at all. The law does not require a person or a couple to file a tax return if no taxes are owed, and the higher standard deduction will take some seniors off the tax rolls altogether. Most advisors will say that it is still a good idea to file, even if no taxes are owed. Some government programs like senior housing, Medicaid eligibility and other benefits have income requirements that depend on tax returns.
There are several other changes that can affect seniors, so find out now and plan ahead. For upper income seniors, the amount of deductions allowed has changed, even if they still itemize. One deductible expense that did not change is costs related to tax preparation, so thinking ahead may even be a deduction.
Ourseniors.net is fortunate to be associated with several top-flight experts in tax law and tax preparation. Now is the best time to make certain that your tax matters are in order and that the decisions you make this year are in your best interest. Here are some of the fine Ourseniors.net associates who can offer expert advice and service in tax matters:

The tax planning experts at Ourseniors.net are good examples of the senior-friendly businesses, professionals and service providers you will find on our website, our senior living magazine, “OurSeniors.net Magazine and our social media sites like OurSeniors.net on Facebook
Please use these and the other resources at Ourseniors.net to fill all your senior needs, such as-

  • Locating senior home care
  • Finding the best senior assisted living or 55+ communities in Florida
  • Finding a Florida CPA or Florida attorney
  • Choosing a senior real estate specialist or finding financial advice for seniors

As always, you can contact an OurSeniors.net Advisor by phone at 866-333-2657 (se habla Español), or by using Contact Us. Check out our website at Ourseniors.net and take an online look at our senior living magazine, OurSeniors.net Magazine by clicking its link. You can view the entire OurSeniors.net Directory of Approved Vendors.

Leave a Reply