While the ink is not yet dry on the new tax law and the president has yet to sign the final tax bill, a cursory review of its provisions reveals certain tax planning ideas for 2017. Again, we are still “digesting” the full ramifications of the new tax law. Notwithstanding we would advise the following for 2017:
• Prepay 2017 state income taxes.
• Accelerate any of your children’s unearned income into 2017 (rates go up in 2018).
• Push business income to 2018 (rates go down in 2018, plus deduction).
• Buy and place in service an electric car (tax credit expires at end of 2017).
• Recognize any possible business losses (they will be limited in 2018).
• Prepay investment expenses and tax prep fees in 2017 (nondeductible in 2018).
• Pay any moving expenses related to a job in 2017 (the deduction is eliminated in 2018).
• Sell any business processes or patents before the end of the year (this will be treated as ordinary income in 2018, and is capital gains in 2017).