INCOME TAX PLANNING

Not to be confused with tax form preparation, income tax planning is the analysis of your financial situation to determine how your after-tax wealth can be maximized.

IMPORTANT CHANGES FOR 2019

Here are some of the changes from the 2017 Tax Cut and Jobs Act as they relate to 2019 taxes:

  • While the personal and dependent exemptions have been repealed, the standard deduction is now $12,200 for individuals and $24,400 for married couples.

  • The child tax credit is now $2,000.

  • State and local taxes can still be itemized, but they are capped at $10,000.

  • The charitable deduction for a cash donation is now up to 60% of adjusted gross income.

  • The mortgage interest deduction is now capped at $750,000 of loan value instead of $1 million. Home equity loan interest (on a loan up to $100,000) is only deductible if it is used to buy, build, or improve the home.

  • The “miscellaneous itemized deductions” have been eliminated. This includes investment advisory fees, tax preparation fees, safe deposit box rentals, et al.

  • For small business owners, there is now potentially a deduction of 20% of the income earned by a business.

  • Alimony payments for newly divorced couples are now treated similarly to child support payments. They are not deductible to the payer, nor are they taxable to the recipient.

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Gap To Gap Financial (“Gap To Gap”) is a registered investment advisor offering advisory services in the State of California and in other jurisdictions where exempted.  Registration does not imply a certain level of skill or training. The presence of this website on the Internet shall not be directly or indirectly interpreted as a solicitation of investment advisory services to persons of another jurisdiction unless otherwise permitted by statute. Follow-up or individualized responses to consumers in a particular state by Gap To Gap in the rendering of personalized investment advice for compensation shall not be made without our first complying with jurisdiction requirements or pursuant an applicable state exemption.

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