- The Republicans might pass their tax-reform bill before the end of the year.
- Since President Donald Trump's tax plan is not yet finalized, it remains to be seen exactly
- Still, there are some things taxpayers can do before the end of 2017 to get ready.
The Republicans' tax plan might be passed soon.
In case it does, there are some things you can do now to prepare for the looming changes. Although a final version of the tax bill remains to be seen, there are certain steps folks can take now to get ready in case tax reform goes into effect for 2018.
The team at TaxAudit, an audit defense service, came up with several tax moves to make before 2017 comes to a close.
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"No one knows for certain if a tax bill will pass before the end of the year, how the Senate and House bills will be reconciled, or what the final product will look like before it goes to the Joint Committee on Taxation," Dave Du Val, TaxAudit's chief customer advocacy officer, said.
"Nevertheless, there are provisions where the two bills are in agreement," he continued. "It's a compelling reason to be proactive with your end-of-year planning."
We put together five key things to think about doing now.
Pay your 2017 state income tax in full.
Prepay your property taxes for next year.
Deducting the full amount of your current property tax bill in 2017 might provide a larger tax benefit if your tax rate goes down next year under the new plan, TaxAudit says.
If your property tax bill is greater than $10,000, you'll also be able to deduct more of it by paying next year's bill early.
Think about what possible changes to the AMT might mean for you.
If you've been planning to buy a car, do it before the end of the year.
Buying a car before the end of the year might be a smart idea for taxpayers in states with no state income taxes who itemize and claim the sales tax deduction, according to TaxAudit.
The purchase also provides a deduction on vehicle registration fees, which will likely be eliminated under the new bill.
Contribute to charities.
December is the season of giving. But if the holiday spirit is not enough to inspire you to donate, then there is also a tax incentive.
If you think your itemized deductions next year might not exceed the proposed new higher standard deduction, you might want to think about making your 2018 charitable contributions this year, TaxAudit says.