These Are the Money Moves I’ll make Before the End of 2017


1. Defer my income:

  • Some stocks that I bought earlier this year are doing quite well, since I’m setting up for a buy in Puerto Rico, instead of taking the gain in 2017, I’ll be taking the gain in 2018. Should the buy come, I might have to cash out early, but for now, I’ll be holding out until 2018

Income is taxed in the year it is received—but why pay tax today if you can pay it tomorrow instead?

It’s tough for employees to postpone wage and salary income, but you may be able to defer a year-end bonus into next year—as long as it is standard practice in your company to pay year-end bonuses the following year.

If you are self-employed or do freelance or consulting work, you have more leeway. Delaying billings until late December, for example, can ensure that you won’t receive payment until the next year.

Whether you are employed or self-employed, you can also defer income by taking capital tax gain in 2018 instead of in 2017.

Of course, it only makes sense to defer income if you think you will be in the same or a lower tax bracket next year. You don’t want to be hit with a bigger tax bill next year if additional income could push you into a higher tax bracket. If that’s likely, you may want to accelerate income into 2017 so you can pay tax on it in a lower bracket sooner, rather than in a higher bracket later.

 2. Take some last-minute tax deductions

For me, I’m paying the first 2 quarters of 2018 personal property taxes 15 days early, so I can clock it for 2017, as 2018, we might just use standardized deduction.

Just as you may want to defer income into next year, you may want to lower your tax bill by accelerating deductions this year.

For example, contributing to charity is a great way to get a deduction. And you control the timing.

  • You can supercharge the tax benefits of your generosity by donating appreciated stock or property rather than cash.
  • Better yet, as long as you’ve owned the asset for more than one year, you get a double tax benefit from the donation: You can deduct the property’s market value on the date of the gift and you avoid paying capital gains tax on the built-up appreciation.

You must have a receipt to back up any contribution, regardless of the amount. (The old rule that you only had to have a receipt to back up contributions of $250 or more is long gone.) Other expenses you can accelerate include:

  • an estimated state income tax bill due January 15
  • a property tax bill due early next year
  • or a doctor’s or hospital bill.

3. Sell loser investments to offset gains

Well, this year, I’m taking about $1400 in taxes loss, which might counter the taxes gain from selling and buying earlier this year.

A key year-end strategy is called “loss harvesting”—selling investments such as stocks and mutual funds to realize losses. You can then use those losses to offset any taxable gains you have realized during the year. Losses offset gains dollar for dollar.

And if your losses are more than your gains, you can use up to $3,000 of excess loss to wipe out other income.

If you have more than $3,000 in excess loss, it can be carried over to the next year. You can use it then to offset any 2017 gains, plus up to $3,000 of other income. You can carry over losses year after year for as long as you live.

I’ll be updating my dividend/passive income sometimes in the new year, maybe considering doing some of the taxes early so know how much to set aside to pay the big tax bill in April.


What’s about you? What are your year end activities that you’d do to shore up your finance?


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