2017 Simple Year-End Tax Savings Ideas

November 14, 2017  | By Kevin Smith

(may not apply to you, always consider your cash flow and cash reserve first, and always consult your CPA for details)

  • Increase your pre-tax 401k contributions from your final paychecks of 2017. You are allowed up to $18,000 for the year ($24,000 if you are over 50).
  • Make an extra mortgage payment to increase interest deduction in 2017.
  • If you typically take a standard deduction and you own a home, you may be able to itemize if you paid your 2016 property taxes in January 2017 and you pay your 2017 property taxes in December 2017.
  • Charitable donations – deductible amounts to Public Charities are 50% of cash and 30% of personal property (other forms of charity and rates of deductibility apply, also subject to AGI limitations)
  • Not sure which charity to support yet, but you want to go ahead and make a donation and take the deduction? Ask us about Donor Advised Funds. This is a way to store your donations in an investment account, giving you time to decide the best way to allocate the funds to charity.
  • Do your kids or grandkids have earned income? If so, you can gift them funds to set up a Custodial Roth IRA.
  • More advanced strategies exist and may or may not apply to you. They typically take more time to plan and implement.

Important 2018 Tax Changes (as they stand)

  • 401(k) max contributions – $18,500 under 50 and $24,500 over 50
  • Annual gift exclusion increases by $1,000 to $15,000
  • Social Security maximum taxable earnings increases by $1,500 to $128,700
  • Income tax brackets – 2% inflationary increase across the board
  • Standard deduction – increased $250 for single and $300 for married
  • Personal exemption phaseouts – you can earn about $5,000 of additional income in 2018 before phaseouts kick in
  • IRA and Roth IRA phaseouts – modest increase to the level of income at which your IRA and Roth IRA tax benefits decline
Posted in: Tax Planning
Kevin X. Smith, CFA
512.467.2003   |  [email protected]

Kevin is on a mission to find better ways to explain complex concepts in increasingly simple and meaningful demonstrations. Everyone has a different level of interest in learning about investing – ranging from “I just want to know that I…Read More




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