Year end tax strategies

by MaxEntropy_Man Fri Dec 22, 2017 6:21 pm

With the Republicans having rammed us in the ass for 2018, what year end financial moves are you making/considering. Please share ideas.

by confuzzled dude Sat Dec 23, 2017 10:12 am

One of the tips from WaPo is to prepay your 2018 property taxes...

https://www.washingtonpost.com/news/wonk/wp/2017/12/22/5-things-to-do-before-jan-1-to-lower-your-tax-bill/?hpid=hp_hp-top-table-main_wb-5thingstaxbill-1201pm%3Ahomepage%2Fstory&utm_term=.026dacfedbad

by MaxEntropy_Man Sat Dec 23, 2017 10:32 am

confuzzled dude wrote:One of the tips from WaPo is to prepay your 2018 property taxes...

https://www.washingtonpost.com/news/wonk/wp/2017/12/22/5-things-to-do-before-jan-1-to-lower-your-tax-bill/?hpid=hp_hp-top-table-main_wb-5thingstaxbill-1201pm%3Ahomepage%2Fstory&utm_term=.026dacfedbad

Done. Town will only accept payments for the first half of the year. Also maxing out on my HSA contribution this year. Usually I only put the difference of the deductible between the high cost low deductible cadillac plan that employer offers and the high deductible low cost plan that I currently have. This year I decided to make an extra contribution to reach the IRS allowed max. Also made the January mortgage payment in December.

Here is a strategy I am considering that sounds too clever by half: Make an extra state income tax payment towards final quarter of 2017 (since they won't let us prepay 2018 state taxes), put extra money in it and get it deducted from this year's return. And for the excess MA gives you a choice, get a refund or apply it to next year's state income tax. If you get a refund you'll have to pay federal income tax on it next year. But that's not as bad because while they've screwed us with the deductions, next year's tax rates are better. Better still if your state allows you to apply the refund to next year's state income taxes, it reduces your next year's AGI than if you received a refund. However, I am worried about the AMT implications. Confusing. Need some tax help, but the fuckers are too busy because the Repukes did it so late in the year.

by confuzzled dude Sat Dec 23, 2017 10:58 am

Well..

And yes, Congress already knows what you're planning, so amounts paid in 2017 for state or local income tax which is imposed for the 2018 tax year will be treated as paid in 2018. In other words, you can't pre-pay your 2018 state and local income taxes in 2017 to avoid the cap. There is not, to date, a similar restriction for property taxes.

https://www.forbes.com/sites/kellyphillipserb/2017/12/20/what-your-itemized-deductions-on-schedule-a-will-look-like-after-tax-reform/#740cecca6334

by MaxEntropy_Man Sat Dec 23, 2017 11:05 am

confuzzled dude wrote:Well..
And yes, Congress already knows what you're planning, so amounts paid in 2017 for state or local income tax which is imposed for the 2018 tax year will be treated as paid in 2018. In other words, you can't pre-pay your 2018 state and local income taxes in 2017 to avoid the cap. There is not, to date, a similar restriction for property taxes.
https://www.forbes.com/sites/kellyphillipserb/2017/12/20/what-your-itemized-deductions-on-schedule-a-will-look-like-after-tax-reform/#740cecca6334

I know that, but I am filling a form which says it is applicable to the final quarter of 2017. So I still get to deduct on the 2017 1040. Whatever happens to the excess will be in 2018 (at the lower tax rate).

by Guest Sat Dec 23, 2017 12:29 pm

Paycheck to paycheck deal for me. I can’t prepay anything and I delay payments as much as I can. Most times my math is in 100s not 1000s.

Just the other day I was chatting up another divorcee friend and she said with pride how she took no money from her ex (except whatever college tuition he contributes to their kids now). I said sheepishly laughing - oh well I milked my ex. To which bff replied sternly- all of it was for good cause, you took nothing for yourself. And I shrugged and agreed.

So my strategy is to take it as it comes, coz poors r us have no money to save money. Atleast next year I’m not spending anything on my clothes and cosmetics. So that’s my supporting strategy.

(Typing this while getting hair colored at a salon but I mean that’s excusable, sorta. I mean I can explain this expense).

by confuzzled dude Wed Dec 27, 2017 8:43 pm

DC area counties are making provisions to allow prepayment of property taxes.

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