As the possibility of federal tax reform looms, people in retirement do have some options that could prepare for potential changes, according to USA Today in "Retirees: 4 ways you can start planning for possible tax law changes now."
These things include:
- One of the changes being talked about is eliminating the deduction for state and local taxes. Therefore, people who live in high tax states might want to start considering moving to a more tax-friendly state.
- Congress has discussed increasing the standard deduction. That might make it a good time to create a donor-advised fund to take advantage of current tax law and then donate to the fund later, as necessary.
- While there is talk of eliminating the estate and gift taxes, do not count on it for planning purposes. Even if they are eliminated, they can always come back later.
Above all, consult with an experienced elder law attorney to create an estate plan that is flexible enough to work in a variety of situations.
Reference: USA Today (Oct. 13, 2017) "Retirees: 4 ways you can start planning for possible tax law changes now."