One of the proposals that is consistent in both the House and Senate versions of the bill are the elimination of state income taxes as an itemized deduction. Our records show that we prepared, and sent you, estimated state income taxes for 2017. With the likelihood this deduction will not be of any federal tax benefit in 2018, we are advising our clients to pay their 4th quarter state estimated tax payments on or before December 31, 2017 in order to preserve that benefit as an itemized deduction. We will be able to claim the estimated tax payment on your 2017 federal tax return on Schedule A Itemized deduction. Any state estimated tax payments made in 2018 may not be an allowable itemized deduction in 2018.
Other items to consider is the payment of your winter tax bills on or before
December 31, 2017, since this seems to be different between the two proposed income tax bills and accelerating charitable donations.
There are many other proposed changes and the final bill will not be known yet, but we felt this would be one we did not want you to miss. This may be the last year we are able to claim state income tax payments as a federal itemized deduction.
Should you have any questions, please contact us.