Planning for 2018 Taxes

I know, I know, you haven’t even started on your 2017 taxes. Honestly, me neither. But the new tax laws offer a great opportunity for people who might not have enough itemized deductions in one year to exceed the standard deduction but who might have enough itemized deductions every two years.

We actually started this in 2017, but I’ll write this as if we will begin in 2018.

Charitable donations, property taxes, and an extra month of mortgage interest, those are what we have to work with. We don’t have enough medical expenses to clear the 2% threshold. The mortgage interest is easy. Instead of paying our January mortgage on January 1, we pay it in the last week of December 2018. Property taxes take a bit more planning because our mortgage company takes care of it, but that’s solved by a quick call: what proof does the company need us to send? We can only pay taxes that have already been assessed. And we have to have the money months before it would normally be due and wait until our escrow account gets adjusted before seeing that money back. Finally, we can pay our 2018 charitable gifts normally and send in a year’s worth in December for 2019.

However, that means we have to start saving now. Which is why I’m bringing it up now. It means:

  • Saving up in 2018, spending in December 2018, and taking the itemized deduction in 2018.
  • Saving up and taking the standard deduction  in 2019.
  • Spending what we saved and taking the itemized deduction in 2020.
  • Lather, rinse, repeat.


The closer the itemized deductions are to the standard deduction–or even a bit over–the more valuable this is. Is it worth it? For us, yes, For others, it depends on how much they’ll save every two years and how much time/effort it takes.

What does it hurt to check?


Update: For those of you who are visual, Forbes has an article, “What Your Itemized Deductions On Schedule A Will Look Like After Tax Reform,” with a line edit of the Schedule A. Very helpful.

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