Look at the Big Picture

  • Evaluate strategies for 2017 while considering implications for 2018.
  • Tax planning can provide a preview of your tax situation and guide last-minute endeavors.
  • You should strive to legally minimize income taxes and avoid surprises.

Impact of Tax Proposals

  • We may see major tax legislation before the end of 2017.
  • 2017 might be the last year that many taxpayers claim the standard deduction for the foreseeable future.
  1. In 2018 the standard deduction may be nearly twice its current amount.
  2. Deduction for mortgage interest may be curtailed.
  3. Deduction for state and local income taxes may be eradicated.
  4. Deduction for real estate taxes might be restricted.
  5. Deduction for medical expenses may be limited or abolished.
  6. Deduction for unreimbursed employee expenses might be eliminated.
  • Moving expense deduction may be eliminated.
  • Exclusion of gain from sale of a principal residence may be modified.
  • Availability of like-kind exchanges may be reduced.

Last-Minute Amounts

  • Maximizing 2017 itemized deductions may be prudent because of impending legislation.
  • Make final deductible payments (mail check or charge on a credit card by December 31).
  • Consider non-cash charitable contributions.
  • Maximize 401(k) or similar retirement plan contributions.
  • Would it be beneficial to accelerate payments for real estate taxes, state/local income taxes and your January mortgage?
  • Does it make sense to postpone income until 2018 if you have the ability to do so?
  • Contribute to a 529 college savings plan?
  • Are any funds left in a Section 125 flexible spending account?
  • Consider the applicability of making gifts to the $14,000 annual gift tax exclusion per recipient.

Consider Changes in Life Status

  • Did your marital status change during 2017?
  • Were any children born this year? Did any children get married?
  • Did you experience a death in the family?
  • Was there a change in your employment status?
  • Did you purchase or sell a primary residence or other property?
  • Will you or a dependent begin or end college education soon?

Evaluate Gains and Losses

  • Analyze non-qualified investments to determine if it makes sense to dispose any of them.
  • You may be able to generate deductible losses while preserving much of your original portfolio by selling securities and repurchasing them at least 31 days later.
  • Don’t forget about possible capital loss carryovers available from 2016.
  • Remember that losses from flow-through businesses may be limited by basis, passive activity and other provisions.


Christopher Harper, CPA, MBA
Instructor of Accounting
Seidman College of Business