If you or anyone you know suffered losses from Hurricanes Harvey or Irma, check out Rev. Proc. 1018-09 for guidelines regarding the acceptable amount of loss you can take. The $10,000 cap for deducting state and local income taxes in 2018 is causing a flurry of activity. Many states are working to create ways around the cap.
Here is a provision in the new law getting very little “press”. I think it is very important and want to be sure you understand it. Under previous law, inflation was measured by the consumer price index for all urban consumers. This is called CPI-U.
This is being replaced with Chained CPI.
Here are the differences:
- CPI-U measures the cost of goods and services consumed by a “typical urban household”.
- Chained CPI assumes that if a particular good or service becomes too expensive, consumers will seek a less expensive alternative.
The result is that Chained CPI grows more slowly than CPI-U. This means that the eligibility for certain inflation-linked deductions and credits will grow more slowly in the future.
Barbara A. Culver
CFP®, ChFC®, CLU, AEP®