COMMENT ON TAX REFORM IMPACT

As September 15 rolls into view its probably important to not only remind readers to make their quarterly estimated tax payments on time but also to evaluate whether they are sufficient. With the Tax Cuts and Jobs Act changing the tax landscape dramatically for some in 2018, you may want to refigure your payments. This also applies to those who have all their taxes withheld from paychecks.

The TCJA did not change federal withholding tables to take into account the cap on state and local tax deductions. For people in high tax states such as California, the loss of those deductions, coupled with the loss of personal exemptions and all miscellaneous itemized deductions, could increase your 2018 taxes despite the rate cuts. This may come as a surprise when you file your 2018 tax returns next year, and if you owe money you may be subject to penalties.

I would recommend looking at it now so that corrective measures, like increasing withholdings or bumping up your 3rd and 4th quarter estimated tax payments, can be made to eliminate or at least reduce potential penalties.

By |2018-09-10T10:38:57+00:00September 10th, 2018|Pauls's Tax Blog|0 Comments

About the Author:

Paul Scholz, CPA, MST is the Managing Partner of Onisko & Scholz, CPA Firm in Long Beach, CA. He is in charge of the Firm's Tax Practice, and has a specialty in estates and trusts.

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