Tax pro explains how new plan will affect New Yorkers
December 20, 2017 08:19 PM
Under the Republican's new tax plan, what's going to change for the average taxpayer and when will those changes start?
For starters, for most of us when we file our 2017 taxes in the next few months, it will be business as usual.
Jim Cole with BST Accounting says the first change you're likely to see is a few extra dollars in your paycheck.
"Once they implement the tax rate changes and the withholding tables will change and people will actually see less withholding than they did the year before," explained Cole.
He says the intent is to move more money through the economy throughout the year, not just in a refund check the following April.
That means an average household with an annual income of $150,000 might see $1,600 to $2,000 less come out of their paycheck during the year.
Will that impact the refund you typically get or payment you make come tax time the following year? It's unlikely -- unless you have a significant number of itemized deductions.
"They could see a change. There will definitely be some people that will be adversely impacted, but the overwhelming majority will probably see some reduction," noted Cole.
Surprised to hear that? Despite some of the "sky is falling" predictions for New Yorkers, Cole expects most residents to come out on the plus side. The plusses just won't be as robust as in most other states.
"If you're in Florida or Texas earning the same income that somebody in New York is, your overall tax situation is better in those 'no income tax' states," pointed out Cole.
As far as recommendations to make the most of the changes? If possible, get next year's deductions in this year.
"Charitable contributions -- if you're not going to top this $24,000 threshold next year, do you fund your church pledge in December and get the deduction this year, where next year that contribution might not reduce your taxable income," noted Cole.
Cole also suggests you consider paying outstanding state income taxes before the end of the month.
Updated: December 20, 2017 08:19 PM
Created: December 20, 2017 05:49 PM
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