Beyond Year-End Tax Planning (Quoted in The Washington Post)

David recently had the opportunity to share his thoughts on the new tax law with Michelle Singletary of The Washington Post and was quoted in her article titled, "Start 2018 with a new strategy for your taxes." What follows is our expanded perspective on tax planning as we close out 2017 and prepare for 2018 and beyond.

The new tax law is bringing about significant changes in how we engage in strategic planning. Many opportunities are going away for good (e.g. recharacterization of Roth conversions) while some have popped up with only a brief window and need to be implemented before 12/31/17. In the past week and a half, there has been a lot of media attention on these strategies, and if you haven't already, you should consider doing the following right now.

• Pay your Q4 estimated state income tax before 12/31/17 (if you will itemize for 2017 and will not be subject to AMT)
• Prepay your property taxes to the extent currently assessed by your local jurisdiction (if you will itemize for 2017 and will not be subject to AMT)
• Accelerate charitable gifts into 2017 (If you will itemize for 2017)

Thankfully, however, most of the changes in the tax law won't require you to make frantic moves. We are currently in the process of carefully reviewing the new legislation and discussing it with fellow tax professionals to make sure we understand the financial planning implications going forward. We will then contemplate each client's unique situation, evaluate the new opportunities created, and consider what changes should be made in our approach.

With so much current focus on taxes, it’s also important to step back and look at the big picture. While taxes can have a significant impact on financial decisions, the goal is not necessarily to minimize taxes, but rather to maximize after-tax return. Even more, tax planning, like all financial planning, should be done within the context of a broader life plan, so we not only seek to maximize wealth but also our return on life!