This will be an interesting year to say the least when you go to file your tax returns. Most will be surprised, some good and some bad. From the tax return structure itself looking different, to a long list of deduction changes, everyone will be seeing something new. All year we tried to give our readers a few pearls of wisdom on planning, sometimes how to act from a tax perspective and sometimes to offer alternative paths to take in behavior that would potentially end in additional tax savings. An example of that is having IRA “required minimum distributions” go from your IRA directly to the charity of your choosing if you are over 70, instead of coming to you first and then from you to the charity. Both result in satisfying your IRA “RMD” and both end with a charity getting the same amount of money, but the tax calculations, especially after the 2018 tax code changes, end up very different for most taxpayers. The code is complex and being a patchwork of rules and changes over so many years some things are a patch on a patch on a rule that no longer exists, so often the end results of planning can be a real head-scratcher as to why things work out the way they do….but the code is what it is; imperfect. What is the point of this last blog of 2018?
If you don’t mind what you pay in taxes then relax and do nothing. If you don’t like what you pay in taxes, you likely can legally and ethically manipulate it with knowledge and effort. Make a NEW YEARS resolution: “I’m going to find and go see a tax planner in 2019!”
Happy New Year to all!