New Regulation to be Aware of in 2018

This article is for informational purposes only. Please seek financial and legal guidance from professionals if you need specific questions addressed.

Most people who have been watching the news have likely heard about a sweeping overhaul of the tax code. While some people may brush this off as another piece of legislation passed by Congress, it is important to think about how this new law will impact not only the individual but also their family. What are some important things to know?

Most Florida homeowners have been taking advantage of the $10,000 property tax deduction that homeowners in Florida can take advantage of. Some people are concerned that this deduction may go away and would like to pre-pay their taxes early to take advantage of this deduction. Unfortunately, this is not allowed. Florida laws prohibit homeowners from paying their property taxes more than a year before they are due. Furthermore, houses have assessments that set the property taxes and help to calculate the property taxes that someone should pay. These are not done until the new year and, therefore, people do not know how much they will need to pay in property taxes. So it is not possible to pay property taxes more than a year before they are due. Unfortunately, paying property taxes in advance of more than a year before they are due is simply not an option, even though many homeowners would like to pay their property taxes in advance.

Remember that to qualify for the $10,000 deduction, the house must be worth enough to merit this kind of property tax. To hit the limit, the house would have to be valued north of $500,000. Furthermore, there are a number of state deductions for taxes in 2018 that people should be familiar with. Therefore, people should talk with whoever prepares their taxes to ensure that they are not missing out on any of these new deductions. People should be sure to maximize their refund and not to overpay on taxes. Most people are not familiar with how to accomplish that, so consulting with an experienced tax professional is likely always in their best interest.

The state of Florida is one of the largest employers in the state and those who have retirement plans through the state will likely see some changes to how they manage their savings. Starting with the new year, the default retirement plan for the state of Florida will be similar to a 401K (only for state employees) unless the individual elects to go with an alternative program, such as the state's pension. With the state's pension program, an employee will be "vested" (entitled to the typical pension plan) after 6 years of service (prior to 2011) or 8 years of service (after 2011). This investment program, regardless of the individual's choice, will be driven by investments chosen by the state. If the employee leaves their state job, the investment plan can be changed to a private 401K after changing jobs.

Clearly, there are numerous upcoming changes that could impact an employee's financial status. It could be a good idea to speak with an experienced legal provider so that any questions or concerns can be addressed.

Article updated September 21, 2020.