It may be too late for many Pennsylvania taxpayers to make a difference in their taxes for 2017, but this is the perfect time to prepare for next tax season. In light of the many new tax rules the federal government enacted last year, many are seeking advice about the best ways to avoid tax issues on their returns for the 2018 tax year. Of course, the point is to keep one’s tax bill low and to take advantage of every opportunity to save money.
Some advisors recommend that taxpayers start with a clean slate by assuming everything has changed. Enough of the rules are different this year, including changes in standard deductions, that a mistake could cost a taxpayer considerably. For example, while child tax credits have increased, so have the qualifying income limits, so many taxpayers may qualify who were not eligible in the past.
One step that is wise for taxpayers to take under any circumstance is to review their withholdings. Doing so may release more money to one’s paycheck to allow for more prudent use of income. For example, some may find this is a good time to increase the amount they deposit in long-term savings plans like IRAs and 401(k)s.
There may be other ways that taxpayers can make the most of the new year, both in their federal and Pennsylvania state tax obligations. This is a good time to seek advice and guidance for effectively applying new provisions. A skilled attorney can assist those with questions about any tax issues they may have.