MINNEAPOLIS - The holidays are coming to an end and the new year is fast approaching. While many are busy returning gifts and taking down holiday decorations, tax experts say it's time to start thinking about your 2016 tax return.
Minneapolis CPA Steve Warren is a senior manager at Schechter, Dokken and Kanter and says 2017 may be a game-changer when it comes to your taxes.
"We're expecting that president-elect Trump is going to reduce tax rates for most people when he takes office next year," Minneapolis CPA Steve Warren says.
However, the good may also come with some bad. Warren says besides promising to reduce tax rates for most Americans, Trump has also promised to eliminate several deductions many taxpayers use to save thousands of dollars on their taxes.
"What Trump is talking about is getting rid of the alternative minimum tax, getting rid of the estate tax and some other deductions. It's unclear exactly what he will do," Warren explains.
But what, if anything, can someone do to a prepare for this? Warren is encouraging taxpayers to consider taking a deduction in 2016 when the tax rate will likely be higher.
"For a lot of people, you may want to take the deduction this year while we still have the opportunity," Warren explains. "That will lower your tax rates while it's higher now as opposed to 2017."
Warren says there's still time to make a charitable donation that could help out your tax situation. It may also be a good idea to sell off stocks and other investments that lost money in order to minimize capital gains.
"If you have capital gains you can use your capital losses not only to offset those gains, but when your capital losses exceed your capital gains, you can take up to an additional $3,000 of capital loss and use it to offset other income on your tax return," Warren explains.
The 2017 tax filing deadline is April 18.