D'Ottavio & Associates, Inc.

Don't forget to set your clocks back one hour before you go to bed tonight!

As the year comes to an end and new taxes laws have come to light, many individuals have questions on what these new tax law changes will bring. Most of these changes can and will be discussed during our tax meeting. The main question many have asked in recent weeks deals with the need to make prepayments on taxes. There is a cap on what can be written off on your 2018 tax return for state taxes. The amount is $10,000 between state/local income taxes and real estate property... taxes. This limit is for both single and joint tax filers. You cannot prepay your state income taxes. Vouchers for 2018 state taxes payments have not been published. You can prepay your real estate taxes; however, it has not been established if it will be accepted by the IRS and can be revoked. You can however pay your two installments on your 2017/2018 property tax bill like normal. Also, if you have a mortgage that is over $750,000, your mortgage interest will be limited to the portion up to $750,000. Interest paid on Home Lines of Credit will not be deductible in 2018. Only interest on the acquisition, construction, and substantial improvements on a qualified residence secured by the qualified residence will be deducted. Many might question what constitutes a substantial improvement. NO specific guidelines have been provided for this term which means it will be determined by the circumstances surrounding each transaction. Last, job expenses for W-2 earners will be eliminated. This includes supplies, dues, tools, and a few others. It is does not include travel, mileage and meals. These will still be deductible. Those of your who own a business will not be affected as these types of write offs that are not part of itemized deductions. There are many changes that have taken place and hopefully we can get through them smoothly and you all will have a firm understanding of what to expect. I look forward to seeing you all in the new year.