"We got you tax reform!" exclaims the GOP.
It's a Christmas miracle.
The GOP tax bill, Tax Cuts and Jobs Act (TCJA) of 2017, actually is the most sweeping tax legislation in more than 30 years. Really. The highlights: a big reduction in corporate tax rates and a bunch of changes to personal income tax rates and deductions.
So while many companies are popping Champagne right now, folks who live in high-tax states may feel a pinch since the state tax deduction is being limited, starting 2018. (Heavy sigh from this girl who lives in Jersey.)
In addition, "the deduction for interest on home equity indebtedness is being eliminated for taxable years beginning after December 31, 2017," says says Lisa Greene-Lewis, CPA and tax expert at TurboTax. (For what it's worth, it comes back in 2026.)
So if you have been deducting the interest on your home equity loan, that goes away too (again, sigh from yours truly).
Now granted, these changes all start in 2018 taxes so that means it will go on the tax return that you file in 2019.
Still, talk to your advisor about prepaying either your state taxes or that home equity loan if your situation allows.
And then proceed as normal with your usual year-end tax planning. If you're head is spinning, watch the video above for some things and we'll help you do a few things now so you can save some of that hard-earned money in April.
Want more info on the new tax plan: Be sure to read this for more on the how the tax plan affects your retirement planning.
And want some 60 Second Tips from TheStreet?
- 60 Second Tips: Here are Stocks to Give as Gifts
- 60 Second Tips: Navigating Financial Aid
- 60 Second Tips: Questions to Ask Before Marriage
- 60 Second Tips: Do You Need Long Term Care Insurance?
- 60 Second Tips: How to Re-Enter the Workforce as a Retiree
- 60 Second Tips: Best Return on Your College Investment
- 60 Second Tips: Why Your Dream Job Might Not Be Advertised Online