tax reform

3 year end tax tips spurred by tax reform

While most of us are busy with holiday parties, we don't want to be bogged down by more things to add to our to-do list. But today the GOP takes its next step in its rush to pass sweeping tax reform to give 'great Christmas gifts' to the middle class (The bad news for us in the tri-state area (NY, NJ, CT), many of us are facing a potential tax increase thanks to the $10k cap on real estate or state and local tax deduction). It is therefore important for taxpayers, both personal and business, to be aware of the potential effect on their finances. Here are 3 actionable tips to take before year end to put you in a better position for the coming tax code changes.

Be Charitable

First of all, the charitable deduction isn't going away. However with the higher standard deduction ($24k in 2018, up from $12,700 in 2017 for couples; $12k in 2018, up from $6,350 for singles), many people may no longer continue itemizing. The Tax Policy Center estimates that fewer than 10 percent of filers will opt for itemizing versus about 30 percent currently. Therefore, if you plan to itemize this year but not next, then it may make sense to pull forward some of your charitable giving.

Thanks to another strong year of gains in the stock market, investors have sizable unrealized capital gains. If you decide to make a charitable donation, you would be wise to donate stocks with significant appreciation, thereby eliminating the capital gains tax and yielding the charitable deduction.

Make your January mortgage payment early and pay real estate taxes if possible

Usually I recommend making mortgage payments as late as possible without penalty, however in this case, you could take advantage of a larger interest expense deduction for 2017 by pulling your January payment forward into the last week of December. This makes sense because tax rates will be cut the following year so the deduction will have a bit more impact this year.

If you pay your property taxes directly to the state, you should considering paying your entire 2018 tax bill before year end if you will be hit by next year's cap of $10,000. However if you're subject to the alternative minimum tax or close to it, you won't get a tax benefit for paying this bill in December, so there's no need to rush. Be sure to talk it over with your tax professional. 

Pay down your home equity loan

Interest on home equity loans will no longer be deductible beginning in 2018 under the GOP tax bill. Like the mortgage, you may want to pay your January payment in December. Furthermore, as a result of the proposed change, home equity loans in general will be a bit more expensive to borrowers so you may want to consider paying them off sooner rather than later.

Considering that things can change quickly in Washington, you should continue to monitor the situation and how it affects your finances. You should also check with your accountant for advice on how the changes are likely to affect you.


Note that the Runnymede investment team will discuss our outlook on 2018 on our quarterly investment webcast in the next couple of weeks. If you are interested in attending, please email us at

"Trump warns Congress not to disappoint him on tax reform" by marcoverch is licensed under CC BY 2.0

Share This Story, Choose Your Platform!

About the Author: Chris Wang

Chris Wang


Please remember that past performance may not be indicative of future results.  Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Runnymede Capital Management, Inc.-"Runnymede"), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful.  Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions.  Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from Runnymede.  Please remember that if you are a Runnymede client, it remains your responsibility to advise Runnymede, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. Runnymede is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. A copy of the Runnymede's current written disclosure Brochure discussing our advisory services and fees is available for review upon request. Please Note: Runnymede does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to Runnymede's web site or blog or incorporated herein, and takes no responsibility for any such content. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly.

Search Website

Annuity Review Database

Follow Our Podcast

Google Podcasts
Apple Podcasts

Recent Posts