The new federal tax-reform law made some substantial changes to the U.S. tax code and obviously has a major impact on American taxpayers’ financial plans.
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“For example, with interest rates so low, maybe some of the things you are doing to defer taxes no longer make any sense,” he said. “It’s an individual decision.
“There isn’t any rule generalization,” Carson added. “You need to roll up your sleeves and do the planning.”
The GOP tax law caps state and local tax deductions at $ 10,000, which is well below the average amounts claimed by individuals residing in states such as New York, California and New Jersey.
Cathy Curtis, founder and owner of Curtis Financial Planning in Oakland, California, said that’s a big concern for her clients in the Golden State.
“Tax reform is a big deal for my clients in California, because we’re a high-tax state and they are looking at the loss of several SALT deductions,” she said. “It’s going to cause a lot of my clients a bigger tax bill.
“Some of that will be offset by the lower tax rates, of course, but it kind of depends on what tax bracket you’re in.”
The national economy has been strong, and forecasts for next year have been bumped up a bit due to the tax cut. However, there’s a lot going on right now, and there’s no way to tell what the long-term economic impact will be from the tax changes. With that said, that’s what is keeping her clients awake at night, said Carolyn McClanahan, founder and director of financial planning at Life Planning Partners.
“My clients are excited about saving money now, but they’re worried about what [tax changes] are going to do to the economy and its impact on the deficit,” she said.