Time running out to take full advantage of tax deductions before reform

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(Source: 3TV/CBS 5) (Source: 3TV/CBS 5)

Now that congress has passed tax reform, you’ve got limited time to make sure you take full advantage of your deductions under current tax law. 

The new GOP tax bill takes effect Jan. 1 and nearly doubles the standard deduction, making it pointless to itemize your federal taxes unless you are very wealthy. 

Certified Public Accountant Robert Hockensmith says tax credits and deductions you’ve claimed for years on your Arizona taxes will still easily apply to your federal taxes when you file April 17, 2018. However for the following tax season, you will likely take the new standard deduction rather than itemize because you will see a greater return.

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There are four things you can do by Jan. 1, to make sure credits and deductions count on your Arizona taxes and your federal taxes.

First donate items to non-profits and give to the foodbank and local schools.

“Doing that you get a double benefit because when you do your federal tax return this year, that counts as a charitable contribution,” says Hockensmith.

Second, pay your property taxes ahead of time. This is the last time you can do that because of the new tax reform.

“In Arizona the average real estate tax is about $3,000 for your house,” says Hockensmith. 

[RELATED: What the tax bill means for Millennials]

“You can actually pre-pay your real estate tax for next year and double your tax deduction now.”

Third, call the Arizona Department of Transportation and see how far in advance you can pay your car registration.  Owners of certain vehicles can pay up to five years in advance.

“If you get rid of the car you get a credit back from the state so you don't lose the money,” says Hockensmith.

Fourth, consider purchasing high-ticket items to cash in on the sales tax deductions for state and federal. Hockensmith cautions you to learn more about your deduction before buying because the math may not add up for individuals. 

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