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Moves due to tax bill passage
12-21-2017, 08:45 AM
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#1
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Thinks s/he gets paid by the post
Join Date: Jun 2004
Location: Diablo Valley (SF Bay Area)
Posts: 2,705
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Moves due to tax bill passage
Interested in year end moves due to passage. I'll start:
Paying April property taxes 12/29/17 instead of 4/1/18
Future trading in IRA instead of brokerage so I can do 1040A (think Sch D stayed)
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12-21-2017, 08:52 AM
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#2
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Thinks s/he gets paid by the post
Join Date: Feb 2014
Location: Williston, FL
Posts: 3,925
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Waiting until 2018 to do a $65K Roth conversion... I was going to wait until the market corrected a bit, I am still waiting...
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FIRE no later than 7/5/2016 at 56 (done), securing '16 401K match (done), getting '15 401K match (done), LTI Bonus (done), Perf bonus (done), maxing out 401K (done), picking up 1,000 hours to get another year of pension (done), July 1st benefits (vacation day, healthcare) (done), July 4th holiday. 0 days left. (done) OFFICIALLY RETIRED 7/5/2016!!
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12-21-2017, 08:54 AM
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#3
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Thinks s/he gets paid by the post
Join Date: Jul 2006
Location: Denver
Posts: 3,518
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If you are unlikely to exceed the standard deduction next year, bundle charity giving and create/fund a donor advised fund before the end of the year. Use appreciated securities/funds. Take the deduction in 2017.
Time is running out for this move. Check cut-off dates if you haven't already started this process.
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12-21-2017, 09:07 AM
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#4
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Thinks s/he gets paid by the post
Join Date: Jun 2016
Posts: 4,663
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Paying our property taxes early would result in a corresponding increase in AMT for us in 2017 so we can’t do anything to help with the SALT limitation next year.
Probably going to pay off our HELOC since that interest will no longer be deductible.
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12-21-2017, 09:13 AM
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#5
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Recycles dryer sheets
Join Date: Oct 2015
Location: Bozeman
Posts: 194
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Quote:
Originally Posted by Scuba
Probably going to pay off our HELOC since that interest will no longer be deductible.
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Can you give me a little detail on this please? I was planning to apply and take out a HELOC in 2018. I hadn't heard of anything in the tax bill that affects the deduction of the interest on HELOCs, but it feels like information overload any time I look at news stories on the tax legislation.
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12-21-2017, 09:25 AM
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#6
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gone traveling
Join Date: Oct 2016
Posts: 255
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Quote:
Originally Posted by walkinwood
If you are unlikely to exceed the standard deduction next year, bundle charity giving and create/fund a donor advised fund before the end of the year. Use appreciated securities/funds. Take the deduction in 2017.
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+1. Recently set up a DAF and funded it for a couple years (planning to do every-other-year charitable bunching), but now that it's unlikely I'll itemize again I'll probably fund it a bit more.
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12-21-2017, 09:45 AM
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#7
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Thinks s/he gets paid by the post
Join Date: Jun 2004
Location: Diablo Valley (SF Bay Area)
Posts: 2,705
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Quote:
Originally Posted by l8_apex
Can you give me a little detail on this please? I was planning to apply and take out a HELOC in 2018. I hadn't heard of anything in the tax bill that affects the deduction of the interest on HELOCs, but it feels like information overload any time I look at news stories on the tax legislation.
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interest on mortgages & HELOC for acquisition & improvements will be deductible on 750k of loan. Interest on HELOC for debt consolidation won't be
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12-21-2017, 09:47 AM
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#8
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2013
Location: Les Bois
Posts: 5,761
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Quote:
Originally Posted by Scuba
Paying our property taxes early would result in a corresponding increase in AMT for us in 2017 so we can’t do anything to help with the SALT limitation next year.
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we are in the same boat
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You can't be a retirement plan actuary without a retirement plan, otherwise you lose all credibility...
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12-21-2017, 10:12 AM
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#9
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Thinks s/he gets paid by the post
Join Date: Jul 2013
Posts: 1,046
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12-21-2017, 10:20 AM
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#10
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2017
Location: City
Posts: 10,351
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Quote:
Originally Posted by gayl
... Paying April property taxes 12/29/17 instead of 4/1/18 ...
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I read that there is an IRS opinion that this won't work.
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12-21-2017, 10:23 AM
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#11
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Moderator Emeritus
Join Date: Jan 2007
Location: New Orleans
Posts: 47,500
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I'm not doing anything, because I never have enough deductions to itemize now that I am retired, mortgage free, in a low SALT state, and with what I regard as low taxes already (7% of my AGI last year). I finally dared to try the calculators for the old vs new taxes. It looks like in my case, my taxes under the new rules will be even lower than that, without doing anything at all, bringing them down to about 5% of AGI. But, we'll see. Anyway, any further reduction is almost venturing into the trivial, and it hardly seems worth the effort to lower my taxes further.
Sure makes life simple for me. Wishing you all some productive tax planning this week and next.
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Happily retired since 2009, at age 61. Best years of my life by far!
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12-21-2017, 11:13 AM
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#12
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Recycles dryer sheets
Join Date: Feb 2013
Posts: 226
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My understanding is that in 2018 you can still itemize/deduct up to $10k in state and local taxes. So unless your RET and state income tax paid will be greater than $10k in 2018, then there is no pressure to pay RET before year-end.
Or am I missing something?
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12-21-2017, 11:15 AM
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#13
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2013
Location: Les Bois
Posts: 5,761
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Quote:
Originally Posted by younginvestor2013
My understanding is that in 2018 you can still itemize/deduct up to $10k in state and local taxes. So unless your RET and state income tax paid will be greater than $10k in 2018, then there is no pressure to pay RET before year-end.
Or am I missing something?
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I don't think so - $10K is pretty low if you live in a state that has personal income tax and you own a home
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You can't be a retirement plan actuary without a retirement plan, otherwise you lose all credibility...
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12-21-2017, 11:19 AM
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#14
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Recycles dryer sheets
Join Date: Feb 2013
Posts: 226
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Quote:
Originally Posted by Big_Hitter
I don't think so - $10K is pretty low if you live in a state that has personal income tax and you own a home
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Agreed! I am sure it is easy to hit that figure if you live in areas like Westchester NY or LA, SF, etc. Just wanted to make sure I was understanding correctly.
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12-21-2017, 11:27 AM
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#15
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2009
Posts: 6,695
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Earlier in the year, my plan was to take the standard deduction in 2017 and do some bunching of deductions in 2018, mainly for state income taxes, the big item I can bunch into one calendar year because I can pay the 4th quarter's estimated state income taxes in either of 2 calendar years. I didn't have any unusually large med expenses in 2017 which, unlike in 2015 and 2016, kept my itemized deductions below the SD when I don't pay the 4th quarter 2017 estimated state income taxes in 2017 but in early 2018 instead.
When the estimated cap gain distributions came out in early November, this bunching plan looked even better because those deductible med expenses fell some (10%-of-AGI exclusion rose when one MF I own planned a huge distribution in late December).
But once the tax reform bill began gaining steam, my plan to bunch deductions into 2018 while taking the SD in 2017 went away. I will now pay my 4th quarter estimated state income taxes in a few days and itemize in 2017 while taking the SD in 2018 (and probably every year thereafter). I also made sure to make my charitable donations this year including a donation of old clothes.
Now if I could only escape the ACA subsidy cliff.......
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12-21-2017, 12:22 PM
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#16
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Moderator Emeritus
Join Date: May 2007
Posts: 12,901
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Quote:
Originally Posted by W2R
I'm not doing anything, because I never have enough deductions to itemize now that I am retired, mortgage free, in a low SALT state, and with what I regard as low taxes already
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+1.
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12-21-2017, 12:38 PM
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#17
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,363
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Quote:
Originally Posted by gayl
...Paying April property taxes 12/29/17 instead of 4/1/18 ...
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Quote:
Originally Posted by OldShooter
I read that there is an IRS opinion that this won't work.
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Any details OldShooter?
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If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
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12-21-2017, 12:40 PM
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#18
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2013
Location: Les Bois
Posts: 5,761
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Quote:
Originally Posted by OldShooter
I read that there is an IRS opinion that this won't work.
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if you are paying 2017 property taxes in calendar 2017 that aren't "due" until 2018 how can that not be okay?
for example, we pay property taxes in arrears - our 2017 taxes are due in two pieces, half at the end of december and half in 2018
if I pay both pieces today how can I not itemize all of that in the 2017 tax year?
__________________
You can't be a retirement plan actuary without a retirement plan, otherwise you lose all credibility...
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12-21-2017, 12:55 PM
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#19
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Thinks s/he gets paid by the post
Join Date: Jun 2004
Location: Diablo Valley (SF Bay Area)
Posts: 2,705
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Quote:
Originally Posted by younginvestor2013
My understanding is that in 2018 you can still itemize/deduct up to $10k in state and local taxes. So unless your RET and state income tax paid will be greater than $10k in 2018, then there is no pressure to pay RET before year-end.
Or am I missing something?
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with the new SD I won't itemize in the future. My prop tax = 3k + FTB = 5k .... trying to figure out how to do just the 1040A from now on. So 2017 = prop tax 4.5 (3 pymts) + 5k. I read you can pay prop taxes already billed as in past years just not prepay in income taxes
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12-21-2017, 12:58 PM
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#20
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Administrator
Join Date: Jan 2008
Location: Chicagoland
Posts: 40,708
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According to my tax advisor, property taxes can be prepaid as long as the taxing authority is accepting prepayment. In other words, it can’t just be a credit to an account, it must be applied to an assessed or estimated current or future tax liability.
An early payment of a second installment would qualify, as would an early payment when the county has not yet assessed but offers to accept prepayment and apply to the upcoming assessment.
A payment where there is no acknowledgement of forthcoming liability would probably not qualify.
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