[Source: ABC7 News]
The new tax overhaul signed into law by President Trump last week will affect every one of us.
From small businesses to tax deductions and divorces, there are plenty of changes to be aware of. Here to discuss and sort it out for us is top California family law attorney Christopher C. Melcher.
What does this tax plan accomplish?
“The more that I’m studying it, the more I’m seeing there’s wide range impact of this. Almost everyone will see a reduction in their tax bill next year. We thought it would trend more towards the very wealthy, but everyone will see some type of reduction. Maybe for an average household, $800-$900 a year,” explains premier divorce attorney Christopher C. Melcher.
Even in California?
“We (Californians) get hit a little bit hard because we lose the right to deduct all of the state income taxes that we pay and the county taxes that we pay on the houses. Those are going to be limited to $10,000 a year, so we don’t fair as better as other states. They are predicting $800-$900 a year per average household of tax savings,” states elite California divorce lawyer Christopher C. Melcher.
Who will end up paying more with this new tax bill?
“I think people who might pay more are the ones who live in the high state taxes, states like California and New York, that don’t have the benefits of some of these other deductions that they are getting for small businesses for example,” says Christopher C. Melcher. “There may be a few people that are paying more, but the more that I’m studying it I’m seeing that most people will get a benefit out of this.”
What about alimony deduction? Is there a change it that?
“There is. In about 2 years from now, that deduction is going to go away and will make it a little bit more difficult for people who are getting a divorce because there is not a tax subsidy to the alimony payments so there is a little bit less money to pay and support starting in 2019 for new orders,” reports divorce attorney Christopher C. Melcher.
Does that affect divorced families or someone going through a divorce right now? Should people going through a divorce get their taxes done right away?
“As long as they have a divorce order or divorce agreement by the end of 2018, they are ok. But starting in 2019 the deduction for alimony is going to go away, so that will make it a little harder on those families,” voices Christopher C. Melcher.
Do you have any year-end tips? How should we prepare for these big changes?
“I suggest pre-paying property taxes. Rather than waiting for March or April for that next installment, paying it by the end of this year because of that limitation on local taxes that will go away next year, we can pre-pay those taxes that will actually save us some money,” states California divorce lawyer Christopher C. Melcher.
Can we pre-pay the entire year in advance?
“I think they only allow the next installment for March or April. We should already have those bills. Rather than waiting, I would pay that now, accelerate that and get that benefit of a deduction before the end of the year,” specifies Christopher C. Melcher.
For more information, check out walzermelcher.com.