Tis the season for property tax payments for many across the country and most certainly here in the south, Texas. Wait just a second before paying that tax payment!
Break In – Possible New Tax Plan
We are very aware of the new tax plan being talked about and candidly the doubling of the standard deduction, and possible property tax cap deduction ($10k annual max) if actually passed may make this strategy less efficient. Our problem is time is running out to make our decision and we have no formal tax plan.
We are sending this post out under current tax laws, but acknowledge major tax overhaul MAY change the effectiveness.
To Clump or not to Clump
Each year near the end of the tax year we like to remind folks that one of the few tax bills (and deductions for that matter) that we have total control of still is our property tax payments …. By paying two property tax payments in the same year, there may be more productive uses of funds.
- Just under the standard deduction? – Check if doubling the payment in one year would move into a deductibility mode
- Higher/Lower Income across major thresholds – If you have a HUGE income year your property tax payment will likely be phased out. If Uncle Sam is going to see little or none of you this year, it may be wise to hold that property tax payment until next year
- High/Low Charitable/Donations year – Much the same as above –
- Expecting something different in the next year – Think it out, you have control for once with this payment/deduction!
Reach out to us if you need help brainstorming…. that’s our job!
We expect to continue our tax related reminders as the year nears end, but we are being held hostage by the possible changes … December 15th marks the end of session for congress … a last minute passage will really hold our feet to the fire for analysis ! Bring it on, better late than never!
Have a Great “More Productive Write Off” Tax Day!
John A. Kvale CFA, CFP
Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth