We are racing towards the tax season finish line like the US Bobsled team in China (hopefully a bit faster), and now that we have seen a large volume of tax returns it is interesting to see what our initial projections are for who is most affected by the 2018 Tax Act. As a courtesy we calculate what our client’s 2017 tax profiles would look like under the 2018 rules, and the results can be generalized:
If you don’t itemize (think: renters) and your combined income(s) are around $50k or below, you probably come out ahead.
If your combined incomes are north of about $250k annually, you also probably come out ahead.
If you are in that middle range between $50k-250K, you might break even, but likely will pay more under the new law.
The above are generalizations, and there are a lot of exceptions depending on your unique individual tax profile. Yesterday I signed tax returns for a married couple making about $1.5 mil per year, and a 94 year old widow making $20k in social security and $20k in retirement (my first client ever!) and they both will pay more next year. That surprised us.
Bottom line is that you should look into the damage now and make adjustments for it so that if you will pay more in 2018 you are prepared for it.