Limited time offer: Sign up today and get up to 1 year managed free. See details

Get your next rollover managed free in 2018. Learn how to enroll

Taxes

3 Tax Planning Opportunities to Consider Before 2017 Ends

With a new tax reform bill signed into law, Betterment has several scenarios investors should consider as they anticipate changes to their financial plan.

Alex Benke, CFP®

By Alex Benke, CFP®
VP of Advice and Investing, Betterment  |  Published: December 22, 2017

On Wednesday, the House and Senate passed a sweeping tax reform bill, and the president is signed the bill into law this morning. Betterment is busy digesting all of the changes to understand tax planning strategies that might make sense once the new law takes effect in 2018.

In the meantime, here are some time-sensitive planning opportunities you may want to take advantage of during the last few days of 2017. We encourage you to talk to a tax professional before making any tax moves, but these questions might help you start the conversation.

Situation: Did you pay more than $10,000 in state and local income tax in 2017?

Opportunity: If you aren’t subject to the alternative minimum tax, consider paying your 2017 tax liability, including Q4 estimate taxes, before the end of the year. Note that the final law blocks pre-paying 2018 income taxes. However, if you have 2018 property taxes that your town allows paying early, consider pre-paying them in 2017.

Situation: Are you planning to make charitable donations in 2018?

Opportunity: The new tax laws increase the standard deduction significantly, which means many people who itemized deductions in 2017, including charitable donations, will not benefit from the deduction in 2018. Consider making 2018 charitable donations in 2017 instead. Learn how to make a charitable donation from Betterment (our deadline is 12/28).

Situation: Do you have incentive stock options you’re planning to execute before year end?

Opportunity: Consider delaying excising them until 2018. The new AMT thresholds are much higher, so you could avoid having the stock option exercise trigger an AMT tax liability.

To learn more about how the new tax bill could impact you, listen to the latest episode of the Better Off podcast, where host Jill Schlesinger provides even more advice.

Recommended Content

View All Resources
Using Investment Goals at Betterment

Using Investment Goals at Betterment

Goal-based investing. The idea is prized among financial advisors—and our team at Betterment—but to the everyday investor, it’s often difficult to put into practice.

Betterment’s Approach to Financial Advice: An Overview

Betterment’s Approach to Financial Advice: An Overview

Achieving your financial goals is only possible if you plan effectively. Saving enough, choosing the right accounts, deciding when you can buy a house or when to retire—all of these are essential decisions even before you build an optimal portfolio.

How to Roll Over Your 401(k) to Betterment

How to Roll Over Your 401(k) to Betterment

Betterment makes rolling over your 401(k) simple and efficient. Get started online, or with a rollover concierge.

Start investing smarter

With Betterment, you get personalized advice, low and transparent fees, and unlimited access to licensed experts.

Start your investment plan

I am

years old and

  • Not Retired
  • Retired

.

My annual income is

.

Experience the new way of investing. Sign up today.

Start investing smarter

Get started

For more information and disclosures about the Betterment Resource Center, click here. | See our contributors.