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Frontloading my Schedule A deductions

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  • Frontloading my Schedule A deductions

    This is how I have frontloaded my 2017 Schedule A deductions:

    1) prepaid our primary home property taxes

    2) prepaid our vacation home property taxes

    3) prepaid our Jan estimated state income taxes in Dec.

    4) made a large contribution to our two DAFs

    Based upon tax reform proposals, some of these will disappear and we will use standard deduction of $24k  in the future.....or lump them every other year.  Will this work for you?

     

  • #2
    About the same strategy we're looking into.

    Also ways to funnel even more $$$ through the LLC -- perhaps taxable account through LLC is one thing we haven't done to date.

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    • #3
      I did the DAF.  I still need to pay property taxes and estimates this month also.

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      • #4
        It will be best to run a tax projection to see how frontloading impacts your AMT to determine the best outcome for you.
        Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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        • #5




          This is how I have frontloaded my 2017 Schedule A deductions:

          1) prepaid our primary home property taxes

          2) prepaid our vacation home property taxes

          3) prepaid our Jan estimated state income taxes in Dec.

          4) made a large contribution to our two DAFs

          Based upon tax reform proposals, some of these will disappear and we will use standard deduction of $24k  in the future…..or lump them every other year.  Will this work for you?

           
          Click to expand...


          No. I'll be among the 10% or so that will continue to itemize each year. But I am prepaying state income taxes for 2017 (you don't have to pay them in Utah until April). I'd pay 2018s too if they would let me.
          Helping those who wear the white coat get a fair shake on Wall Street since 2011

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          • #6
            Recently plugged #s into TT. My higher cash balance plancontribution and more deferred $ with spouse’s job in 2017 has almost certainly pushed us back down into AMT territory. Thus prepaying prop and state income tax in 2017 looks like no longer an option for us

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            • #7
              Regarding state/local tax deduction:  I guess I assumed that I could pay 2017 in 2018 and then deduct for 2017 federal taxes?  Is this incorrect?  Should I pre-pay some of this in 2017?  I am an IC that has not had to pay state/local tax in full yet (making estimated payments, first half year as attending).

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              • #8
                1 and 2 not applicable/available in our state. But we have used this “opportunity” to finally get around to setting up a good sized DAF.

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                • #9




                  Regarding state/local tax deduction:  I guess I assumed that I could pay 2017 in 2018 and then deduct for 2017 federal taxes?  Is this incorrect?  Should I pre-pay some of this in 2017?  I am an IC that has not had to pay state/local tax in full yet (making estimated payments, first half year as attending).
                  Click to expand...


                  Nope. Individuals are "cash basis". That means that you can only count something when you pay it. So you'll need to pay your 2017 taxes in 2017 to deduct them in 2017.
                  Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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                  • #10


                    No. I’ll be among the 10% or so that will continue to itemize each year. But I am prepaying state income taxes for 2017 (you don’t have to pay them in Utah until April). I’d pay 2018s too if they would let me.
                    Click to expand...


                    Why won't they let you? I've yet to see a government entity that won't allow you to send them as much money as you so desire.
                    Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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                    • #11




                      Recently plugged #s into TT. My higher cash balance plancontribution and more deferred $ with spouse’s job in 2017 has almost certainly pushed us back down into AMT territory. Thus prepaying prop and state income tax in 2017 looks like no longer an option for us
                      Click to expand...


                      We're doing projections for physicians right and left and are having trouble finding one that benefits by prepaying property taxes. WCI must have some unusual numbers. I was sure we would find some that would save money, but not so far.
                      Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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                      • #12
                        Perhaps the only good thing about the AMT for me is that it makes this decision a lot less complicated.
                        I sometimes have trouble reading private messages on the forum. I can also be contacted at [email protected]

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                        • #13
                          Jfox, Ours doesn't. No bill for 2018 has yet been generated, so they will not let us pay it.

                          I'm still above the standard even in 2018 just based on mortgage interest. so we'll keep itemizing and not bunching deductions for the time being.

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                          • #14




                            We’re doing projections for physicians right and left and are having trouble finding one that benefits by prepaying property taxes. WCI must have some unusual numbers. I was sure we would find some that would save money, but not so far.
                            Click to expand...


                            I am not subject to AMT, so it seems prepaying 2018 property taxes in 2017 would be a no brainer.  Am I missing something?

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                            • #15





                              No. I’ll be among the 10% or so that will continue to itemize each year. But I am prepaying state income taxes for 2017 (you don’t have to pay them in Utah until April). I’d pay 2018s too if they would let me. 
                              Click to expand…


                              Why won’t they let you? I’ve yet to see a government entity that won’t allow you to send them as much money as you so desire.
                              Click to expand...


                              I guess I could call and ask. I wonder what would happen if I just overpay my 2017 taxes dramatically. Do you suppose that 2018 taxes will require me to add deductions previously taken but then refunded back on to my tax bill? I would guess so. But if not, it would be a great investment. It would annualize out to well over 100% returns.
                              Helping those who wear the white coat get a fair shake on Wall Street since 2011

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