Change is in the air in Washington, and many taxpayers are eager to understand the impact that President Donald Trump’s policies could have on their finances. The Pennsylvania Institute of Certified Public Accountants (PICPA) offers some insight on what his policies could mean, and discusses critical concerns that are important no matter who’s in office.
What’s next for tax reform?
Trump has promised tax reform, which includes lower rates for many and having fewer tax brackets. Also being considered is an elimination of the alternative minimum tax. If these proposals are enacted, it could be prudent to defer income now so that it is taxed at a lower rate later, and to make use of any available deductions while rates are higher. The president has also called for ending the estate tax, a step that could have a significant impact on many families and small-business owners. It’s tough to predict exactly what a final tax package will look like, so the best advice is to consult regularly with your local CPA on the smartest choices for your own tax situation. While planning for change is smart, it’s also sensible to continue to follow strategies that make sense in any political climate.
Plan for retirement
Building a secure financial foundation for your retirement is always a good idea. There is some good news on this front in 2017. When you contribute to a traditional IRA, your tax deduction may be phased-out—or disappear altogether—depending on your income level, but the phase-out ranges have risen by $1,000 from 2016 for some taxpayers. The income phase-out range is also higher in 2017 for taxpayers who want to contribute to a Roth IRA, as is the income limit for the saver’s credit aimed at low- and middle-income taxpayers. If you’re not sure whether you qualify for tax-advantaged savings, or you need advice on boosting or starting your savings for your post-employment years, contact your CPA.
About Post Author
