One of the tax proposals that President-elect Trump has made, which also falls in line with the general Republican tax proposals, is increasing the standard deduction for single taxpayers to $15,000 and to $30,000 for joint filers in 2017. That is more than double the standard deductions ($6,350 for singles and $12,700 for joint filers) that currently apply for 2017.
There is no guarantee of these higher standard deductions. But since both the House and Senate have Republican majorities, the odds seem to be in favor of this happening.
Assuming the standard deductions are increased, there is a way you can benefit in 2016. If your itemized deductions are generally lower than proposed increased amounts, you might consider prepaying as many itemized deduction expenses as possible in 2016 and then taking the standard deduction in 2017.
Considerations include prepaying your charitable tithing or other charitable obligations, property tax installments, and any state income tax that might be due on your 2016 return. Also consider any unpaid medical expenses and employee business expenses that might occur.
Call our office to see if this strategy might work for you without triggering the alternative minimum tax. But don’t delay; the expenses must be paid before year-end! If you have questions, contact the experts at Henssler Financial:
- Experts Request Form
- Email: experts@henssler.com
- Phone: 770-429-9166
Disclosures: This article is meant to provide valuable background information on particular investments, NOT a recommendation to buy. The investments referenced within this article may currently be traded by Henssler Financial. All material presented is compiled from sources believed to be reliable and current, but accuracy cannot be guaranteed. The contents are intended for general information purposes only. Information provided should not be the sole basis in making any decisions and is not intended to replace the advice of a qualified professional, such as a tax consultant, insurance adviser or attorney. Although this material is designed to provide accurate and authoritative information with respect to the subject matter, it may not apply in all situations. Readers are urged to consult with their adviser concerning specific situations and questions. This is not to be construed as an offer to buy or sell any financial instruments. It is not our intention to state, indicate or imply in any manner that current or past results are indicative of future profitability or expectations. As with all investments, there are associated inherent risks. Please obtain and review all financial material carefully before investing. Henssler is not licensed to offer or sell insurance products, and this overview is not to be construed as an offer to purchase any insurance products.
