The new tax law has put a whole new spin on year-end tax planning, though it hasn’t eliminated the need to do it altogether.
“The tricks we had in our back pocket have been taken away in the name of simplification,” said Nathan Smith, a director in the national tax office of CBIZ MHM in Tampa.
What we want to do now is look at what we have left to work with.
For starters, fewer people will itemize under the Tax Cuts and Jobs Act. Now, an individual will need total itemized deductions to exceed $12,000, the new standard deduction for individual taxpayers, up from $6,350. Married couples would need deductions exceeding $24,000, up from $12,700.
Even with the nearly doubled standard deduction, there are still moves you can make before 2018 ends to make sure you’re taking advantage of all of the breaks you can get, Smith said — as well as some tried-and-true strategies that still apply.
Here are some of the best ways to lower your tax bill for 2018:
Reduce your taxable income dollar-for-dollar by contributing as much as you can to your 401(k) or employer’s retirement plan by Dec. 31.
If you are 18 or older, you can save up to $18,500 to your 401(k), and if you are over 50 you can kick in an extra $6,000. With IRAs you can contribute $5,500, and if you are over 50, an additional $1,000. (You have until the April deadline to make those IRA contributions.)
Continue reading on CNBC.