For most households, 2017 taxes have been filed and hopefully, your tax returns have already arrived! Now is a good time to plan for next year’s filing since tax preparers are likely to have lighter schedules during this time of year and there are no looming and stressful tax filing deadlines for most taxpayers. The Tax Reform Bill passed by Congress last year took effect in January 2018 and when you file taxes next April, changes may be evident.
California residents should consult a tax professional to learn about the details of the Tax Reform Bill. Particularly impactful for our state – which boasts high property values – are the new deductions set forth for property tax deductions and mortgage interest deductions. “The deduction for state, local and property taxes will be capped at $10,000 annually starting in 2018. The mortgage interest deduction on primary and secondary residences will be reduced, applying to loans under $750,000 rather than $1 million. (1)”
The Internal Revenue Service (IRS) provides information, tips and tools regarding filing 2018 taxes under the new bill. On its website, IRS.gov, under the News and New Releases section, taxpayers are encouraged to do a “Paycheck Checkup” to see how the new laws affect their withholdings. According to the site:
“Among the groups, in particular, who should check their withholding are people who:
Belong to a two-income family.
Work two or more jobs or only work for part of the year.
Have children and claim credits such as the Child Tax Credit.
Have older dependents, including children age 17 or older.
Itemized deductions on their 2017 tax returns.
Earn high incomes and have more complex tax returns.
Received large tax refunds or had large tax bills for 2017.(2)”
Pasadena tax preparer, Roubina Gourdikian, EA, MBA, encourages taxpayers to have their tax professionals run a hypothetical calculation of what their 2018 tax liability would look like. After running hypotheticals on all her clients, Roubina believes that most taxpayers will have around the same tax liability as 2017 assuming their income and expenses are comparable to the prior year. Although she initially was not a big fan of the Tax Cuts and Jobs Act when it first passed, Roubina believes that it’s mostly a wash for most clients once analyzing the pros and cons for each taxpayer.
Roubina Gourdikian is a Tax Preparer that has been practicing locally for 22 years.
Roubina Gourdikian, EA, MBA
Roubina Gourdikian Tax Service
511 S. Marengo Ave.
Pasadena, CA 91101
Office Phone (626)796-1545
Office FAX (626) 796-0370
(1) WHAT TAX REFORM MEANS FOR YOU www.worthynest.com