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BUSINESS Friday 28 december 2018
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How taxpayers can deal with new state, local deduction caps

By TINA OREM $24,000 in deductions, for
Associated Press example, to make item-
If you paid a lot of state izing pay off. Because the
and local taxes in 2018, deduction for state and
buckle up this tax season — local taxes is now capped
new laws cap how much at $10,000, a couple filing
of those payments you can jointly would need to drum
deduct on your federal tax up at least another $14,000
return. That means more of of deductions to make
your income could be tax- itemizing financially worth-
able this year. But before while.
you worry too much, here One way to get over that
are a few suggestions from bigger hump is by “bunch-
tax pros on how to cope ing” charitable contribu-
with the changes. tions, Seifert says. For ex-
1. FIND OUT IF THE CAP ample, a couple who gives
MIGHT AFFECT YOU $5,000 to charity every year
Generally, property taxes might be better off giving
and either sales taxes or $15,000 once every three
state and local income years instead.
taxes are deductible on 4. PLAN FOR A NEW TAX LIFE
federal returns. But this “I think the biggest thing
year, there’s a cap on how is, just make sure that you
much you can deduct — This July 24, 2018, file photo shows a portion of the 1040 U.S. Individual Income Tax Return form for reach out to your CPA ear-
$10,000 ($5,000 for a mar- 2018 in New York. ly enough to do your year-
ried taxpayer filing a sep- Associated Press end planning and think
arate return). That could many as 75 percent of his tax rate than last year. That on maybe what was giv- about the solutions that
make more of your income firm’s individual clients will could offset some of your en to you in other areas, are on the table,” Newton
taxable. hit this new cap on state loss, notes Joe Seifert, a instead of being so con- says.
Buddy Newton, a certified and local taxes. It’s often CPA at the Delap account- cerned about what was There’s also the possibility
public accountant and se- referred to as “the SALT ing firm in Lake Oswego, taken away,” he says. of moving to a place with
nior tax manager at Stock- cap.” Oregon. 3. THINK ABOUT BUNCHING lower taxes. It’s not the
man, Kast, Ryan and Co. “A lot of our clients are Other new rules this year YOUR CHARITABLE CONTRI- easiest thing to do, “but it’s
in Colorado Springs, Colo- paying more than $10,000 might help, too. Parents BUTIONS an idea,” he says.q
rado, offers a quick way a year just alone in state in- may qualify for the larger The standard deduction has
to check whether the cap come tax,” he says. child tax credit, which rose nearly doubled to $12,000
could affect you: Pull out 2. POUNCE ON OTHER TAX from $1,000 to $2,000 per for single filers, $18,000 for
your 2017 tax return and find BREAKS child, for example, or small- heads of household and
Schedule A. If the amount If the SALT cap affects you business owners may be $24,000 for joint filers. That
on line 9 was greater than this year, more of your in- able to take the new 20 could drive many taxpay-
$10,000, you might not be come could be taxable. percent pass-through de- ers to abandon itemizing
able to deduct as much However, the federal tax duction, Seifert says. altogether this year.
state and local tax this year brackets also changed this “There’s give and take in A married couple filing
as you did last year. year, meaning your income this thing for most taxpay- jointly would need to cob-
Newton estimated that as might be subject to a lower ers. People need to focus ble together more than

US consumer confidence tumbles in December

By PAUL WISEMAN expectations for the future “While consumers are end- is solid. Economic growth
Associated Press dropped to the lowest lev- ing 2018 on a strong note, clocked in at a healthy 3.4
WASHINGTON (AP) — U.S. el since November 2016. back-to-back declines in percent annual pace from
consumer confidence The December read- expectations are reflective July through September
tumbled this month as ings “still suggest that the of an increasing concern after surging 4.2 percent
Americans began to worry economy will continue ex- that the pace of economic in the second quarter. At
that economic growth will panding at a solid pace in growth will begin moderat- 3.7 percent, the unemploy-
moderate next year. But the short-term,” said Lynn ing in the first half of 2019.” ment rate is the lowest in
consumer spirits are still Franco, the Conference For now, the U.S. economy nearly five decades.q
high by historic standards. Board’s senior director
The Conference Board, a of economic indicators.
business research group,
said Thursday that its con-
sumer confidence index
fell to 128.1 in December,
down from 136.4 in Novem-
ber and lowest since July.
The index measures con-
sumers’ assessment of cur-
rent economic conditions
and their outlook for the
next six months. Both fell
in December. Consumers’