FOLSOM, Calif., Dec. 12, 2017 /PRNewswire/ -- TaxAudit, the tax audit representation specialists, today released their 2017 year-end tax tips. The company offers income tax audit representation to taxpayers, small businesses, and professional tax preparers. TaxAudit has more than 8 million members and handles more audits and notices than any other firm. The company also offers audit defense to professional tax preparers through its Audit Defense Pro service. TaxAudit prides itself on educating, defending, and advocating for the everyday taxpayer.
"No one knows for certain if a tax bill will pass before the end of the year, how the Senate and House bills will be reconciled, or what the final product will look like before it goes to the Joint Committee on Taxation," said TaxAudit's Chief Customer Advocacy Officer Dave Du Val. "Nevertheless, there are provisions where the two bills are in agreement. For example, both the House and Senate bills significantly raise the standard deduction, while eliminating the state and local income tax deduction and capping the property tax deduction at $10,000. It's a compelling reason to be proactive with your end-of-year planning."
2017 Smart Filer Tax Tips include:
- Pay your 2017 State Income Tax in full. Deducting your 2017 state income taxes rather than waiting to pay any balance due in 2018 can be beneficial if the deduction for state and local income tax disappears or is reduced as included in the Senate version of the bill.
- Pay your 2017/2018 property taxes. Deducting the full amount of your current property tax bill in 2017 may provide a larger tax benefit if your tax rate goes down next year under a new bill – and there's also the possibility that the deduction will go away altogether if the House bill provision prevails, so claim it while you still can.
- Alternative Minimum Tax considerations. The current AMT may make your state and local income tax and property tax deductions less beneficial if you are subject to AMT. However, even if subject to AMT in 2017, you may benefit more by taking these deductions in 2017 rather than possibly losing those deductions entirely or in part in 2018.
- Contribute to charities. It's not too late to make contributions to your favorite charity – and consider making your 2018 charitable contributions this year if you believe your itemized deductions next year may not exceed the proposed new higher standard deduction. In addition, your tax benefit may be higher this year if your tax rate is lower next year. To qualify as a deduction, the funds must be given to a charity that is on the IRS's list of eligible charities and you must itemize your deductions.
- Purchase the vehicle you've been planning to buy before December 31st. This could be advantageous for taxpayers in states with no state income taxes who itemize and claim the sales tax deduction. This purchase also provides a deduction on vehicle registration fees, which is another tax break that is likely to be eliminated under the new bill.
- Convert from a traditional to a Roth IRA before the end of the year. Traditional to Roth IRA conversions may no longer be possible if the provision to eliminate them under the House bill is adopted.
- Sell poorly performing stocks if you've sold winners. If you've sold stocks at a gain this year, it's not too late to sell under-performers to offset those gains. This is a popular strategy for reducing taxes, commonly referred to as "harvesting losses."
- Keep records for all virtual currency purchases and sales. It might sound strange, but the IRS classifies virtual currencies, such as Bitcoin, as property and not as currency. This means that the taxable amount is the difference between what you paid for it (your basis) and the amount you sold it for. Without evidence of your basis, the entire sales price is taxable.
- Check on credits available to you if you've paid for college or school expenses. You'll need orderly records to claim these credits and will receive form 1098-T from your child's educational institution which is required when you file.
- Maximize your contributions to retirement plans. Review your income and expenses to see if you can increase the amount you've contributed before the end of the year.
- Dig into your pile of receipts early. You'll need to meticulously document all expenses you plan to write off and if you start early, you'll save time.
"There's still time to make strategic tax moves even at the end of the year," said Du Val. "Taxpayers should consider our Smart Filer strategies for a potentially larger refund or a lower amount due. No one needs to owe more than necessary or leave money on the table, especially the individual taxpayer."
In addition to these end-of-year tips, TaxAudit will post one tax tip a day via social media on Twitter and Facebook as part of the company's Smart Filer taxpayer advocacy program throughout the 2018 tax season.
As the exclusive provider of TurboTax® audit defense, TaxAudit (formerly TaxAudit.com) is the largest and fastest-growing audit defense service in the country for taxpaying individuals, small businesses, and tax preparers. With over 8 million members, TaxAudit handles more audits than any other firm.
TaxAudit offers IRS and state taxing authority audit representation and defends taxpayers from the moment they receive an audit notice through to the best possible resolution. TaxAudit members receive expert tax representation and relief from the nightmare of being audited – at a price point any taxpayer can afford.
TaxAudit is headquartered in Folsom, CA.