Tax planning is like exercise: You may not always be motivated to do it, but once you’re tackled the task, you feel so much better. (And fortunately for everyone, you don’t need to do tax planning several times a week, consistently, to see a lasting benefit.) I’ve asked Matt Grodin, a San Mateo certified public accountant, to answer three taxing questions:

What are some of key changes in the federal tax law that will affect Bay Area taxpayers?

There’s a $10,000 limit on deductions for state taxes and a $750,000 limit for deductions on new mortgage debt. Previously, home buyers could deduct up to $1 million. As you know, home prices in the Bay Area keep rising to new heights—the median home price hit $820,000 in April—so any restriction on mortgage deductions isn’t exactly good news.

But let’s consider a more promising outcome from changes in tax law. Income taxes will drop for almost everyone who earns under $750,000 a year because fewer will have to pay the Alternative Minimum Tax (AMT). In fact, according to CNN Money, the Tax Policy Center estimated that the number of tax filers affected by the AMT will drop by 96 percent, to around 200,000 nationwide. Also, there will be lower tax rates across the board.

And many local families will benefit from changes in the child tax credit, which doubled to $2,000. The phase-out jumped to $400,000 from $110,000.

Small business owners, including sole proprietors, may benefit from a pass-through tax deduction—a 20 percent deduction on their net business income—if they meet certain thresholds. The rules are complex, so be sure to consult your accountant or tax adviser.

Any advice on bunching donations to take full advantage of tax breaks for charitable giving?

Given that the standard deduction is doubling and the estate tax deduction is limited to $10,000, many more people will find themselves with the standard deduction. The major remaining variables are your mortgage interest and charitable donations, so it can make sense to group your donations into a single year. You could look at using a donor-advised funds so you could take the deduction one year and spread your giving out over several years.

If you’re over 70 and-a-half and must take a required minimum distribution from your IRA, consider qualified charitable distributions, which allow you to reduce your income even if you’re taking the standard deduction.

What do you suggest doing now to make tax preparations easier when it’s time to do 2018 taxes?

The main thing is just not to be caught off guard this year. Many people will pay lower taxes but some will pay higher. The federal government has adjusted taxpayers’ withholding to reflect the new tax laws.

But a lot of clients will find the adjustment has gone too far and they’ll owe taxes even though they’ll pay less taxes in total. So check out IRS tax projection tools or work with a CPA to make sure you’re withholding the right amount.

In general, I recommend that everyone gather their information early. If you itemize, remember that every donation counts, so find that last Goodwill receipt and put it somewhere safe. I hear that every year from clients: “Oh, I had other donations but I forgot to keep the receipts!”

You can reach Matt Grodin at 650.342.4394. His website is

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