The New Year brings new beginnings, and with President Trump expected to sign the new tax reform bill any day, it may pay off to prepare for 2018 by making a few tax moves today. As a recent Seattle Times article outlines, there are a few simple moves you can make now, that will help your tax future. Many of the sweeping changes to the individual tax code will “kick in on Jan. 1, and there are steps you could take in the coming days to maximize new advantages and minimize the potential hit from other changes.”
Here are three key things to consider (and discuss with your tax adviser) before 2018:
Make an early tax payment – Because “the legislation sets limits on the amount of state and local taxes that people can deduct,” homeowners could save by paying property taxes now and deducting them on 2017 tax documents. It is important to check your state and county policy, however, because King County “does not allow payment of property taxes until the year they are due.”
Pay more on your mortgage – As the Times writes, “the tax overhaul will nearly double the standard deductions for taxpayers who don’t itemize, from $6,350 to $12,000 for individuals, and from $12,700 to $24,000 for couples.” This is expected to drastically lower the number of taxpayers that itemize, and if that could be you, you might want to make your January 2018 mortgage payment now. “Doing so would allow you to deduct an extra month of mortgage interest that you might not be able to deduct on your 2018 return if you don’t end up itemizing.”
Make a charitable donation – One of the most popular deductions are donations to charity, and if 2017 will be the last year you’ll use itemized deductions, you’ll want to maximize your contributions.