Rowling noted that the November mid-term elections will occur before American taxpayers face the reality of their 2018 taxes.
Help decide whether to itemize or claim the standard deduction.
With many itemized deductions eliminated and the standard deduction increased, more taxpayers should be claiming the standard deduction, said Rowling.
“Employers will be withholding less, but itemized deductions have also been slashed,” said Rowling. “Saving the extra money from the reduced withholding is good advice, because if it ends up not being needed, [clients] have funds to add to an IRA or SEP or another investment account.”
As of 2018, the following deductions may still be itemized: Medical expenses in excess of 7.5 percent of adjusted gross income, mortgage interest on principal of up to $1 million for pre-law homes and $750,000 for newly acquired homes, charitable contributions, and up to $10,000 of state, local and property taxes.
Consider bunching deductions.
Claiming the standard deduction in one year does not preclude a client from itemizing their expenses in another year. So it might make sense for taxpayers to pick and choose what years they itemize deductions, she said.
“It really depends on the client and the situation,” said Rowling. “Sometimes there might be a high-income year where it might make sense to bunch as much as possible in areas like medical expenses, charitable contributions and mortgage interest."
Deductions that are capped, such as local and states taxes, shouldn't be bunched, she said.
Use a donor-advised fund.