Now that we know what the new tax law will look like for 2018, there are a couple of things to consider before the end of this year. The new law puts limits on itemized deductions, as well as increasing the standard deduction, so you will want to take all of the deductions in 2017 that you can. If you can, be sure to pay your property taxes before year-end. If you have a mortgage, consider making an extra mortgage payment to pull more interest into this year. If there is a charity that you have been considering giving a gift to, now might be a good time to make that gift. If you live in one of the seven states without an income tax and have been considering making a big purchase, you may want to do this before the end of the year. The ability to deduct sales tax will be limited going forward.
So in summary:
1.Pay your property taxes this year.
2. Make an extra mortgage payment this year.
3. Consider making charitable deductions before year-end.
4. If you live in Texas, Florida, or South Dakota, and are considering making a big purchase, now may be the time to buy (you better take advantage of this as it’s not often I will be telling you to make a big purchase).
We will follow-up after the first of the year with more information on how this will affect you.
Brett S. Carleton, CFP®