I heard my nail lady/mechanic say that I should prepay my state and local tax so that I can deduct my state tax in 2017 without having to worry about the $10,000 cap on those deductions in 2018. Is that true?
We love it that tax is THE HOT TOPIC these days because that means CPAs are cool again. Well....maybe not cool again, but cool FINALLY. We love the cool points, but it scares us when everyone thinks they are a tax expert because they stayed at a Holiday Inn Express last night. Luckily, you're smarter than the average person because you are here searching for the answer from our team of qualified CPAs. The IRS has released guidance that states it will disallow payments made in 2017 related to 2018 State & Local Tax Deductions on 2017 tax returns. For more analysis on the tax law change, see our article here: http://www.cumminggacpa.com/single-post/2017/12/27/How-Tax-Reform-Will-Impact-Deductions-Credits-Individuals
I'm busy working on my blog posts. Watch this space!