Experts: Take Advantage Of Deductions Before Tax Reform Bill Is Signed
JERICHO, N.Y. (CBSNewYork) -- One day after congressional leaders hammered out a tax reform agreement, Tri-State Area residents are calculating what the loss of key deductions will cost them.
As CBS2's Carolyn Gusoff reported, some experts are advising people to use their deductions now – before they lose them.
Holiday shoppers said they are expecting no Christmas gift from Washington, with tax reform looming that slashes valuable deductions.
"I'm very concerned, because money is tight, and everybody needs money," one woman said. "We don't want to give more money to the government."
"I think it's going to affect everybody -- anyone who owns property and you pay taxes," another woman said.
The current form of the bill allows taxpayers to deduct only $10,000 in state and local tax -- far below the average on Long Island. So experts urge residents to act now before deductions disappear.
"These changes they're making in Washington D.C., look, they're an assault on all residents across the Tri-State Area," said Town of Hempstead Tax Receiver Donald Clavin.
Clavin urges residents to pay the second half of the school tax bill now, before the new year.
"Pay it now. Don't wait. If you can afford it, make that payment before December 31 so you can have that deduction," he said.
Officials also advised that you check with your local government to see which local taxes you can prepay, and also consider estimating and pre-paying next year's state income taxes.
Robert Spielman, a partner at Marcum -- Long Island largest accounting firm – said even if you have to borrow from a low-interest line of credit, you'll come out ahead.
"The after-tax return on paying them now is going to exceed any cost of borrowing the monies," Spielman said.
As accountants crunch the numbers with each incarnation of the tax bill, they also say consider paying now for any vanishing deductible expenses -- such as unreimbursed employee expenses, meals and entertainment, and accounting fees.
Experts say you should check with your tax preparer first to make sure you are eligible for, and will benefit from, pre-paying. Anything can change until the tax bill is signed.
But experts said there is no downside to prepaying taxes and expenses, and you should plan ahead to make the most of the disappearing deductions.
Because of the alternative minimum tax, not all the recommendations will benefit all local taxpayers. It is important to consult with a tax preparer.