Money moves to make before 2018

Year-end planning is more complicated in 2017 than in the past because of tax changes expected to be finalized by Christmas. As we wait for details, there are still important money moves to make before 2018.

The main theme for 2017 year-end planning for the nearly one-third of taxpayers who itemize their deductions is clear: This will likely be the last year that you will be able to deduct state and local taxes and miscellaneous deductions (tax-prep fees, job-hunting and business car expenses, and professional dues), if they total more than 2 percent of your adjusted gross income. For that reason, if possible, try to bunch as many of these costs into 2017 as you can in order to exceed the 2 percent floor.

The deduction on property taxes looks like it will be limited to $10,000, which means that you may want to consider pre-paying next year’s tax bill. You need to pay the taxing authority directly; sending a check to an escrow account won’t cut it. There is a caveat: Prepaying may subject you to the alternative minimum tax, which can offset the benefit.

If you have investment losses in a taxable account, you can sell them to offset gains from this year. If you have more losses than gains, you can deduct up to $3,000 against ordinary income; if losses exceed $3,000, you can carry over that amount to future years. A tax change that could go into effect next year would force investors to sell stocks on a first-in, first-out basis, which could reduce tax savings with this strategy next year.

You can give up to $14,000 ($28,000 with a married spouse) to as many people as you wish in 2017, free of gift or estate tax. You also can make unlimited payments directly to medical providers or educational institutions on behalf of others without incurring a taxable gift or dipping into your lifetime gifttax exemption.