Perspective: Spring, With Interest
The season for paying attention—and taxes
IT'S SPRINGTIME: The weather is warm enough to draw us outside but not so hot that air conditioning feels really good after only a few minutes in the sun.
Enough plants bloomed during the rains of February and the storms of March that you just know April is going to be glorious.
That’s not all that could take your breath away this spring, however. Tax season is likely to surprise some folks, even if they’ve paid attention to the impact of the Tax Cuts and Jobs Act of 2017.
It boosts the standard deduction and child tax credit and limits or eliminates common deductions. Whether that results in a pleasant or unwelcome surprise depends on how the pieces of your financial puzzle stack up.
I wonder how many of us make financial decisions based on whether the costs are deductible come tax time. It’s certainly common enough to hear people say, “I can deduct it.” You probably know people who use their home equity loans to pay for travel or debt consolidation. You may even be one of them. With the changes to the deductions, the interest is deductible now only if the loan paid for home improvements.
How will you respond to these changes? Will you respond at all?
Any change in the environment is a signal to pay attention. Stop and absorb the colors of spring. Stop and ask whether your spending reflects your values or your tax strategy—or both.