As Republicans in Congress push to approve their tax overhaul this week, accountants and financial advisers in Wisconsin are dealing with a last-minute scramble to pay taxes by the end of the year.
“There’s just a total rush to get the law written, but then for the tax preparer population to learn about what needs to be done and then we have our clients that are asking us to do all this planning,” said Scott Franklin, a CPA and attorney near Milwaukee.
Franklin said he’s had an influx of calls from his clients, trying to decide if they should finish paying 2017 income tax estimates or property taxes before Jan. 1. That’s when changes to the tax code would take effect if the bill is approved.
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“It’s an extremely short time frame here if somebody is trying to get tax bills paid before city hall or village halls close for the holiday weekend,” Franklin said.
But there are some real benefits to getting taxes paid under the current system.
“There’s really some low-hanging fruit of opportunity,” said Nate Byers, a CPA and financial planner in Madison. “Like possibly pay real estate taxes before the end of the year instead of in 2018, because a lot of people are not going to be itemizing and not receiving that benefit going forward.”
Byers said the tax overhaul raises the standard deduction so fewer people will benefit from itemizing their taxes under the new law.
“Making a decision to pay an expense now or defer an expense or accelerate an expense, it’s real money that you save,” Byers said.
Franklin said mostly high-income taxpayers would be affected by the new laws, especially those who pay more than $10,000 in state income and property taxes.
“They’re going to try and accelerate the payment in the next week and a half so that they can get the deduction on the 2017 tax return before its no longer available,” Franklin said.
Franklin said tax preparers have been scrambling to stay up-to-date over the last few weeks while lawmakers have made last minute changes to the final bill.
But Byers said he has been trying to encourage clients to prepare for the possibility that lawmakers would approve the bill.
“A lot of clients that came in earlier, started the planning process and now they’re just implementing the strategies that they were ready to do whenever the tax law became law,” Byers said. “There’s a lot of people now that they’re just reacting.”
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