Taking Advantage of State Tax Deduction for 2017

Please be aware that pending tax legislation may limit deductbility of state income taxes in 2018 and forward. Accordingly, Rackers & Fernandez recommends to all of our clients that you pay any anticipated state liability and 4th quarter state tax estimated by December 31, 2017.

An example of potential tax savings (for those not in Alternative Minimum Tax) is as follows:

A taxpayer in the maximum federal tax bracket for 2017  and owing $8,000 in state taxes for 2017 would save an estimated $3,168 in federal taxes by paying this amount in December of 2017 rather than waiting until January of 2018 (4th quarter estimated tax due date) or untial April of 2018 and paying the amount due with their 2017 tax return.

If any of our clients require estimated tax vouchers or have any questions regarding this issue, please feel free to contact us and we will be happy to assist you.