Tax Reform Destroyed State and Local Tax Deductions—Fight Back
Tax reform put the screws to your state and local income tax deductions, capping them at $10,000. Many states disliked that and have been putting together workarounds.
But now the IRS is creating regulations to put them kibosh on your state’s creative plans. Unless federal lawmakers change their minds, your federal deductions for state income taxes face that $10,000 ceiling.
But you have planning opportunities to make more of your property taxes deductible by
- creating or enlarging a home office,
- establishing or expanding a rental activity inside your home,
- having your trade or business activity incur the property taxes, or
- capitalizing the property taxes.
If you are being hurt by the $10,000 ceiling and would like to make more of your property taxes deductible, you can do some tax planning and make that happen.
Want to know more? Have some tax questions of your own? Get in touch with us and we’ll guide you thru the tax and accounting process.