So this morning we're breaking down the new tax plan
How it is going to affect your paycheck and when those changes will start taking place yes
And Mark Kohler is a tax attorney and financial adviser. He joins us live now via Skype. Good morning. Hey good morning
Thanks so much, and I feel bad. I've got this fireplace behind me
How is this going to affect
people going forward into next year
Well people should see an immediate change in their paychecks
We're looking at all the w-2 wage earners out there probably somewhere between 50 to 300 dollars
In your paycheck itself could change here right away
Specifically who's going to see those changes, or is it gonna be I mean is that most Americans long Americans
Well it is most Americans
And what a lot of people were encouraging our clients to do is get it to some of these excellent
calculators out on the website
New York Times has a good one
Where you can kind of figure out where you normally fall and see where your savings might be and for most Americans it could be
Anywhere from a thousand to maybe?
Five six thousand dollars annually in savings, okay?
So what are the some of the key factors cuz I was I was going through some of these
calculators with the New York Times and a lot of
You know financial financial analysts say that there's so many different factors that are gonna
Figure into how much you're gonna save so what are some of the key factors though that could at least help you get an idea
well you want to of course just make sure you're putting in your
Criteria married single kids or not what state you're in is gonna be a factor, and here's the bottom line
I would say 80% of Americans are gonna see savings what you should be thinking about is
What are you gonna do with that savings? Are you gonna?
Just go out and spend it and add to your own debt like the government or you're gonna
Maybe use some of these wonderful retirement strategies that were saved in the bill that didn't change
Let's use that savings and use it productively
Hopefully I was worried about the property tax deduction that putting the cap on the property tax deduction a lot of people
Wondering if they should try to prepay the property taxes, if possible before the new year
Absolutely if you're one of these blue states of course, Illinois there
Got to really think about
Pre-painted for those that can afford to do it
prepay any
Expenses before your end and these are these itemized
Deductions that you won't be able to take as much advantage of next year prepay in state tax. Maybe some charity
For example if you're a married couple making 260 thousand a year
Maybe it's gonna give a thousand dollars to charity in the next few weeks or months
You'd be better off giving it now
Rather than after January 1st because your tax rates will go down you might see an extra tax savings of
75 to $100 by doing it earlier rather than later, so
Getting back to your paychecks
Tell us again when you expect to see that difference is it going to be the first check that you get in
January or is it gonna take a month or two the pick in
well
we're all hoping the IRS is rushing to get new payroll tables and regulations out to all the
Business owners and payroll companies, so we should see at least by your second paycheck you'll start seeing a little difference or increase their
Some of its retiring what should they do to prepare for these changes?
Well really one of the big changes for those that are investing with their retirement accounts is the Roth
Strategy which is an incredible tax saving strategy usually before December 31st you can say oh
I'm going to characterize part of my IRA as a Roth
And then you had until your tax return to change your mind on a portion of it or all of it
That's called a Roth recharacterization. Well, that's gone now so in the next five days
You've got to decide how much do I want to convert to Roth money and then live with it?
but the retirement planning options are all there the 401k still intact and I think a lot of small business owners are gonna see a
Big benefit too as they is they turn the corner into the new year. Yeah mark
I was just gonna ask you about small business owners anything that they need to keep in mind here starting in January
Hey, I think this has really been a big win for the small business owners
I was really worried about Main Street early on the House bill was more worried about corporate America than US Main Street business owners
So what it is. It's a unique equation, but basically you get a deduction
20 percent off the bottom line of the profit of your business
This is gonna allow a lot of small business owners to change their quarterly deposits put more money in their bank account to hire employees
And hire buy more equipment, and I think it's a great thing for Main Street
So if you're a parent with a child
what what should you look for in terms of you know that tax deductions and
going forward again
Well you bet apparently in this country. We are
encouraging procreation so if you've thought about having a child
This is the year to do it you get a double deduction the child tax credit for having children
And it's expensive to have children this has been a concern of our
Legislators is how do we pay for college and when we have children the child care?
Tax credit is still very viable and a good thing so we're trying to help those parents out there that are
Adding to our population, so it's a good thing in the bill
I guess yeah, all right mark Cole our financial adviser really appreciate your time and advice this morning. Hey
Thanks so much for having me, and he's got his website right there on our screen. We'll talk to you soon. Thanks mark. Thank you