The Senate and House may spend most of the month ironing out the differences in their tax bills. Or they may be delayed by other legislation and not enact a new tax code until the new year.
Either way, high-earning taxpayers cannot afford to wait and see what happens; they need to act this month before certain opportunities go away. And betting on a delay in a final vote is not wise planning: Accountants predict that the new code will take effect on Jan. 1 even if it has to be made retroactive at some point next year.
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The two tax bills have differences for sure — the most obvious being the Senate's seven tax brackets to the House's four. They also have more nuanced discrepancies, like how they treat mortgage interest deductions and small businesses whose owners pay their company's taxes on their own returns.
But even if accountants have not perfected the Excel formulas that will allow them to make exact comparisons, they are already talking to their wealthier clients, particularly those in high-tax states, about what they should do now before deductions go away or are decreased.
For some high earners, lower tax rates could be offset by the end of deductions they have counted on for decades, namely those for state and local taxes, and reduced deductions for mortgage interest and property taxes.