The year is quickly drawing to a close, but there’s still time
to take steps to reduce your 2017 tax liability — you just must act by December
31:
- Pay your 2017 property tax bill that’s due in early
2018.
- Make your January 1 mortgage payment.
- Incur deductible medical expenses (if your deductible
medical expenses for the year already exceed the 10% of adjusted gross
income floor).
- Pay tuition for academic periods that will begin in
January, February or March of 2018 (if it will make you eligible for a tax
credit on your 2017 return).
- Donate to your favorite charities.
- Sell investments at a loss to offset capital gains
you’ve recognized this year.
- Ask your employer if your bonus can be deferred until
January.
Many of these strategies could be particularly beneficial if tax
reform is signed into law this year that, beginning in 2018, reduces tax rates
and limits or eliminates certain deductions (such as property tax, mortgage
interest and medical expense deductions — though the Senate bill would actually
reduce the medical expense deduction AGI floor to 7.5% for 2017 and 2018,
potentially allowing more taxpayers to qualify for the deduction in these years
and to enjoy a larger deduction).
Keep in mind, however, that in certain situations these
strategies might not make sense. For example, if you’ll be subject to the
alternative minimum tax this year
or be in a higher tax bracket next
year, taking some of these steps could have undesirable results.
(Even with tax reform legislation, some taxpayers might find themselves in
higher brackets next year.)
If you’re unsure whether these steps are right for you, consult
us before taking action.
© 2017
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