The late and great David Bowie belted out “Changes are taking the pace I'm going through Ch-ch-ch-ch-changes, turn and face the strange.

Pretty soon every person filing their taxes will have to face some pretty significant tax changes under the leadership of President Donald Trump. While most of these changes will not necessarily affect your tax filing status for 2017, it’s a great idea to stay on top of the changes and what it means for your family so you are prepared.

Trump signed a huge tax overhaul into law, so unless you’ve been living under a rock you’ve probably heard about some major changes which will affect every single taxpayer.

Unless you have time to comb over the 500 or more pages of the legislative language, it’s hard to know if the adjustments will develop into positive news or bad news for your family’s bottom line.

We’ve broken down some key points of the new provisions that could possibly affect everything from your family’s investments to retirement strategies.

It is important to note, while some of these changes went into effect immediately in 2018, a majority will NOT affect your 2017 return due in April. In fact, a relatively large amount of the new changes are set to expire after 2025 and will subsequently transpose to 2017 rules unless Congress extends them.


Doubled tax credit for your children!

Starting this year the $1,000 allotted tax credit for each child under 17 will now be $2,000.

Of that, up to $1,400 of the credit is refundable for lower-income payers for each eligible child claimed. Good news also comes in the form of a new, nonrefundable credit of $500 for a dependant, not a qualifying child but perhaps an elderly parent or adult child who is disabled.

In addition to this new law, it notably maximizes the income phase-out threshold so higher-income families will pocket child credits. More specifically, the credit will phase out couples with AGI over $400,000 (up from $110,000 last year).




Pinching Homeowner Tax Breaks:

Lawmakers have determined to trim the amount of debt on which homeowners are able to deduct mortgage interest from $1,000,000 to $750,000. The restriction applies to mortgage debt incurred after December 15, 2017, to buy or improve a principal residence or second home. Older loans are still subject to the $1 million cap.


Harsher Limits for State and Local Taxes Deductions
The write off for what you pay in local and state income, property, has always one of the most beneficial deductions and will now be squeezed.

Starting in 2018, the law sets a $10,000 limit on how much you can deduct off the state and local taxes you pay. A plan to limit the write-off to property taxes only was scrapped. You can deduct any combination of state and local income or sales taxes or property taxes, up to the $10,000 cap.


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I have over 40 years’ experience in tax planning and preparation, accounting, auditing, and business planning and strategies. My mission is to be your trusted tax advisor for all my clients, because short and long-term tax planning is critical to long term financial success. These are just a few of the many examples of the changes taking place this year. If you need help navigating the waters of your taxes please visit http://www.timwolfecpa.com/