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Decoding GOP tax plan for MN families

"While we are still in 2017, what can you do? What we are seeing is some people prepay their property taxes for next year."

EDEN PRAIRIE, Minn. - At Boulay accounting firm, tax partner Mike Crabtree's clients are asking him to decode the GOP tax plan, many wondering whether to defer income, or pay state taxes early?

“It’s really hard to make a quick comment, is this going to help me or hurt me for any given client,” said Crabtree. “While we are still in 2017, what can you do? What we are seeing is some people prepay their property taxes for next year.”

Considering, the plan caps the amount of state, local, and property taxes you can deduct at $10,000 dollars.

“Being here in Minnesota, where we have state income tax, property tax, those taxes have historically been deductible and now capped at $10,000 for a lot of folks it isn't going to give them much benefit,” said Crabtree.

The changes would double the standard deduction and replace personal exemptions with a boosted $2,000 partly refundable child tax credit. Crabtree believes the plan will simplify the process for some.

“There could be a lot of families that don't itemize anymore just take the standard deduction – fewer numbers on return, you don’t have to keep receipts,” said Crabtree. “Numbers-wise, with rates coming down a little bit, child tax credit coming up, a lot of families might see a lower tax bill, but by how much is hard to say,” he said.

Tax professionals await more details, Crabtree advises getting ahead of the changes by discussing steps to take before the year's end.

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