“The purpose of a tax cut is to leave more money where it belongs: in the hands of the working men and working women who earned it in the first place.” – Bob Dole
We’ve watched the campaign promises, the debates, the flurry of activity and our government in action. The biggest tax reform of our generation has just been passed into law. So what does that mean for you? Will you see more money in your pockets, or are the taxes going up for you next year?
You’ve started working on your tax return (or spoken with your accountant) and it looks like you’ll owe more taxes than you’d like. Now what? It’s too late to change your 2016 taxes now that it’s 2017, right? Fortunately, retirement savings can save you and reduce tax liability!
Jack and Diane Smith are in their mid-50’s. Jack’s father, Thomas, recently passed away. Jack is named as the executor of his father’s estate. Jack isn’t sure exactly what he’ll need to do to handle his father’s estate, so he hires Greg of Freyman CPA and a local law firm to assist him in all of the legal and financial matters related to the estate.
Greg and the lawyers review the legal documentation related to Thomas’ estate. They review his will, and the trusts that he set up for his grandchildren. Greg had acted as Thomas’ accountant, and worked with him years ago to establish a trust that could help avoid probate. The lawyers and accountants review documents related to Thomas’ assets and liabilities, including the title and deed to his home, and his investment statements.
Many existing or soon to be retirees should pay careful attention to the tax breaks that are available to them. As most of us know, when you’re on a fixed budget, every dollar counts. So, what are some of the tax breaks for retirees?
This can be overlooked as many elderly taxpayers may think there’s no chance of deducting these medical expenses. That’s not always true. We’ve seen countless examples of those on dialysis being prescribed specific supplements & vitamins by their doctor that goes beyond just caring for their general health. With the proper support, in those instances, the costs which can be in the several thousand dollar range and possibly greater are eligible deductions. Specifically, if we reference IRS Publication 502 page 16 — it states, “You cannot include in medical expenses the cost of nutritional supplements, vitamins, herbal supplements, “natural medicines,” etc. unless they are recommended by a medical practitioner as treatment for a specific medical condition diagnosed by a physician. Otherwise, these items are taken to maintain your ordinary good health, and are not for medical care.”