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The tax bill makes paying your final 2017 estimated taxes before year end a worthwhile move. For business owners, contractors, and others who may have dividends, stock gains, real estate gains and anything for which taxes haven’t been withheld, consider getting payments in before 2018 begins.
As everyone is probably sleeping off some major holiday feasting, I’ll keep this short and sweet.
One of the provisions in the newly passed tax bill is that beginning in 2018, you will be limited to deducting a maximum of $10k in state and local tax deductions which include income tax and property tax. Many of us have forms of income that do not have their taxes regularly withheld and either pay estimated taxes quarterly or just pay them at tax time in April of the following year. This affects everyone from small business owners and independent contractors to regular wage workers who happen to have stock gains, dividends, or other investment income that they’ll have to pay state income tax on for the year.
Given the tax bill cap on state and local deductions, it may save you hundreds or thousands of dollars to make sure you are paid up on your 2017 state income taxes before the clock runs down on the year.
You are most likely to benefit from this strategy if you meet the following criteria:
You plan to itemize your taxes in 2017 You will either take the standard deduction in 2018 OR you will itemize in 2018 with more $10k in state and local income and property taxes Ideally you