Year-End Planning Tips With Deborah Jacobs – And, Sadly, Our Final Show on KQV

Episode: 208
Originally Aired: December 20, 2017
Topic: Year-End Planning Tips With Deborah Jacobs – And, Sadly, Our Final Show on KQV

The Lange Money Hour - Where Smart Money Talks

The Lange Money Hour: Where Smart Money Talks
James Lange, CPA/Attorney
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Please note: *This podcast episode aired in the past and some of the information contained within may be out of date and no longer accurate. All podcast episodes are intended to be used and must be used for informational purposes only. There is no guarantee that the statements, opinions or forecasts provided herein will prove to be correct. Past performance may not be indicative of future results. All investing involves risk, including the potential for loss of principal. There is no guarantee that any investment strategy or plan will be successful. Investment advisory services offered by Lange Financial Group, LLC.


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  1. Introduction of Deborah Jacobs, Tax Expert, Lawyer and Journalist
  2. New Tax Law Eliminates Personal Deduction, Doubles Standard Deduction
  3. $10,000 Cap on Deductions for Real-Estate Tax and State Income Tax
  4. Pay as Much of Your State, Local Taxes as Possible This Year
  5. Miscellaneous Itemized Deductions Will Be Eliminated in 2018
  6. Use 2016 Tax Return, Schedule A as ‘Scratchpad’ to Calculate 2018 Taxes
  7. Prepay Charity Deductions in 2017, Pay Them Out When and to Whom You Like
  8. Avoid Capital Gains on Stock Sale by Donating the Stock to Charity
  9. Threshold for Medical, Dental Expenses Will Be Lowered to 7.5% in 2018
  10. Health-Savings Accounts Won’t Be Affected by Loss of Deductions

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Welcome to The Lange Hour: Where Smart Money Talks with expert advice from Jim Lange, Pittsburgh-based CPA, attorney, and retirement and estate planning expert. Jim is also the author of Retire Secure! Pay Taxes Later. To find out more about his book, his practice, Lange Financial Group, and how to secure Jim as a speaker for your next event, visit his website at Now get ready to talk smart money.

1. Introduction of Deborah Jacobs, Tax Expert, Lawyer and Journalist

Dan Weinberg: And welcome to The Lange Money Hour. I’m Dan Weinberg along with CPA/Attorney Jim Lange. This week, we are talking tax reform. For better or worse, President Trump will sign the tax cuts and jobs act into law. The tax reform is significant for both businesses and individuals, but this show is going to concentrate on how individual taxpayers might cut their taxes. Now, you only have a couple of weeks to adjust your year-end planning, so this is a vitally important show. Our guest this week is Deborah L. Jacobs. She’s a lawyer and journalist and the author of Estate Planning Smarts: A Practical, User-Friendly, Action-Oriented Guide, a book for consumers that’s now in the fourth edition. Her most recent book, Four Seasons in a Day, describes her creative approach to downsizing. She and her husband rent their Brooklyn townhouse each fall and live in France on the proceeds. You can read her blog at Now, over the next hour, Jim and Deborah will be discussing critical year-end tax-planning action points, specifically regarding itemized deductions, including why you should pay for items you deduct on your itemized deductions so you can claim them this year. The higher standard deduction next year could mean that even if you can itemize deductions, the tax benefit might not be worth it, and your tax rate might be lower. So what will that mean? Now, let’s get right to what will surely be a very important hour filled with information as we approach the year’s end. Let’s say hello to Jim Lange and Deborah Jacobs.

Jim Lange: Welcome, Deborah.

Deborah Jacobs: Hi, Jim, good to be with you. It’s such an exciting time right now for all of us.

Jim Lange: Well, it is, but before we get into the meat of the show, I do have to say that unfortunately, this is going to be my, well, my, and for many people, last KQV radio show. KQV is closing its doors. We are desperately scrambling for a new home, but after, I think, about five years of being on KQV every other week, and then every week on Sunday for the replay, it’s going to feel quite different. So I did want to take a minute to thank some of the people who were responsible. Beth Bershok was the first person who really got me going with the radio show, and she is actually a former radio personality herself, and she was actually doing Dan’s role, which is, let’s call it, monitor, I forget the exact name that we’re doing, and then Dan, who’s been terrific, and, assuming we do continue, he will continue with us. So, I wanted to publicly acknowledge him. David Bear was on the show before him, and thank you, David. Bob Dickey, who is one of the owners of KQV and is my main contact, Bob, you have been terrific throughout. This has been a great experience. And then also, I wanted to thank all my guests. I’m not going to read them all because everybody would fall asleep, but it includes Deborah Jacobs, who has been on before, and it also includes Jack Bogle, Ed Slott, Jane Bryant Quinn, Roger Ibbotson, the 15 top IRA experts in the country have all been on, the top Social Security experts have been on, some of the top estate planners, some of the top index investors. So, thank you all for making this a great success. It is always my dream and goal to provide great information to the people who are open to receive it, and that is actually my marketing plan to provide people with great information. Certain people will be attracted to it and potentially do business with us, but that’s what this show, that’s what my workshops are all about.

But now I’d like to get into the meat of the show, and the reason why Deborah is on is because she published an article in a very prestigious journal that I read that mainly goes to CPAs and attorneys, and she is right on top of the new tax changes, and I think there’s going to be, not only enormous changes, but enormous opportunities to save money by taking action before year-end. So, Deborah, can you give our listeners … first, we’ll do maybe a bird’s-eye view, the big picture of how some of our listeners can save money, and then maybe we can get into some of the nitty-gritty. But can you start with the big picture of why it might make sense for our listeners to pay some of their expenses before year-end that they might have otherwise waited and paid in 2018?

Deborah Jacobs: Sure, and first of all, let me say congratulations to everyone who’s been involved in your show, and I know it’s always hard to go through changes, but sometimes transitions lead us to other wonderful things. So, I’m the eternal cockeyed optimist when it comes to that.

Jim Lange: I like that, “cockeyed optimist.” It’s going to be a great show already!

2. New Tax Law Eliminates Personal Deduction, Doubles Standard Deduction

Deborah Jacobs: Anyway, what I’d like to say is that year-end is always a very exciting time for those of us who work in the tax field because it poses certain opportunities to take various steps now that will save us money this year and potentially next year, and this year, it’s all with a very new twist because we are about to have a new tax law, and the main thing, that law does two things from the perspective of individuals. One is that it lowers rates at least temporarily, but a much more profound thing that the law does is it eliminates certain deductions that we are so accustomed to being able to take, that we have made financial decisions in our lives all these years based on our ability to take those deductions. And as those deductions go away, this will be, for some people, the last year that they’re able to take them. What’s happening under the new tax law is that the personal-exemption section of the tax return is being eliminated altogether. Most people familiar with the personal exemptions, when you fill out forms for your accounting department at a job, they ask you to list the number of your personal exemptions, and your employer uses that to figure out your withholding. That’s all going to change now because the personal exemption’s going away.

The other thing that’s radically changing and that requires us to really think extra closely about what we’re doing between now and New Year’s Eve is that the standard deduction on the tax return is going up in 2018 to $12,000 for single people and $24,000 for married couples. That means that far fewer people will be itemizing. The other thing is that there will be fewer deductions to list for those who itemize, or caps on those deductions.


3. $10,000 Cap on Deductions for Real-Estate Tax and State Income Tax

Deborah Jacobs: So that’s another little twist that we have to think very closely about, and the really big one is the one that affects homeowners and people who live in states that have state and local income tax because, starting in 2018, the deduction for real-estate taxes and state and local income taxes and local sales tax, those deductions together may not exceed more than $10,000. Well, for a lot of people, that’s going to knock a very big deduction off their income tax return.
So, typically at year-end, we talk about postponing income and accelerating deductions. This year, we are for sure going to want to accelerate certain deductions, and a very big one here is the real-estate taxes that you pay on your home. So, while in the past, we’ve always said, well, you might want to consider prepaying the taxes that are not due until, for me, January 1st. You might want to consider paying those before December 31st. This year, you’ll especially want to be vigilant about that, and also consider paying as much of the 2018 real-estate taxes as your locality allows. What you can do may depend in part on whether your locality operates, as we do, on a calendar year or whether they have, like, a June 30th fiscal year. New York City, for instance, has a June 30th fiscal year, and I don’t think I’m going to be able to prepay my real-estate taxes for 2018 beyond the first half of the year. So that’s a really big thing to think about.

4. Pay as Much of Your State, Local Taxes as Possible This Year

Deborah Jacobs: The other thing people should think about is making sure that you’ve paid all the state and local taxes that you owe for 2017. You want to make sure you pay them before the end of the year so that you can deduct them on your 2017 tax return. Once you get into 2018, those again will be lumped together with your real-estate taxes, and you might lose that deduction. You cannot prepay your state and local income taxes the way you can prepay your property taxes. So don’t even go there, but do make sure that you have paid everything that you’ll owe for 2017 before the end of the year.

Now, because the itemized deductions, which appear on Schedule A of your income-tax return, think of them as movable parts; that is, you know, your property taxes and your state and local income taxes might justify your filing the Schedule A and itemizing your deductions rather than taking the standard deduction, but because you got onto that Schedule A, you were able to deduct a lot of other smaller-ticket items that helped you along, and charitable donations is one example, so that if you were filing a Schedule A so that you could deduct your real-estate taxes and your state and local income taxes, you would also be able to deduct your charitable donations. Likewise, if your medical expenses exceeded a certain portion of your adjusted gross income, you could put those on the Schedule A. And what’s going to happen now is that, as fewer people qualify to file the Schedule A, because they don’t have enough deductions to itemize without the real-estate taxes and the state and local income taxes, those other smaller, for most people, deductions are going to go by the wayside as well. So you want to be sure when you think of accelerating deductions for 2017 that you get all the little things as well because it may be your last year to deduct those. Investment management fees is another one if you have somebody managing your money for you and you’re paying them based on a certain percentage based on assets under management. That deductible expense, that expense that’s been deductible in the past, came under a category on the Schedule A, which the whole category is being eliminated, the miscellaneous itemized deductions, which you could deduct if they exceeded 2 percent of your adjusted gross income. So this is causing a whole shift in year-end planning.

Jim Lange: OK, well, that was a mouthful, and by the way, very well said, and I would agree with everything that you said. So why don’t we just do a quick recap of some of the things that you said and see if I got you right, so things that our listeners can do, and then maybe we’ll go into some of the specifics. So the first thing that you said was that the standard deduction, that is the amount that the government is going to give us whether we have any deductions or whether we have a lot, is going to go from $12,000 to $24,000, which is roughly double what it is now. Is that fair?

Deborah Jacobs: That’s correct, and what that means is that fewer people are going to be listing their deductions on their income tax returns starting in 2018.

Jim Lange: Right, and one of the reasons why it is so important to take some of these deductions, and again, we’re going to go through them one-by-one, is that, for many people, let’s say, for discussion’s sake, that you are married and your total deductions now are roughly $18,000. So you exceed the standard deduction of the current $12,000 by $6,000. So, for this year, you presumably would be able to itemize, and if next year, your expenses are identical, you’re going to get a $24,000 deduction just for being married, and that means that all the deductions that you normally get to deduct are going to go away, so they won’t do you any good. So what I believe Deborah and I are saying, that is, for those types of people, people who are, let’s say, above the threshold for deducting their itemized deductions but might not be next year, it is a great time to accelerate those deductions and pay them this year. And then, I think we’re going to go through deduction-by-deduction. So that’s one thing, we have a higher itemized deduction.
The other thing is, let’s even assume that your deductions are still way over the standard even next year, that Deborah mentioned that we are going to be in a lower tax bracket, and I think that that’s going to be important and we’ll probably get into some of the details, but the lower tax bracket, for people making between, like, $165,000 and $300,000 is going to go down significantly. So I don’t want to make short of the differences in the tax rates, although I will agree with Deborah. They’re not as dramatic for lower- and middle-income taxpayers.

So that’s another factor, and then, as Deborah stated, there are going to be limitations, for example, on the state and local real-estate taxes, where you’re not going to be able to deduct more than $10,000. It’s going to make sense to pay some of those. And then, the other thing that Deborah mentioned, which I think is really big, and particularly for people who have a W2, that is they are an employee, maybe a college professor, maybe a teacher, maybe a writer, maybe a policeman, maybe somebody who has a job, gets paid with a W2, but spends their own money because that is either officially required of the job or it’s very important that they do this for their job, so the professors have all types of expenses related to being a professor. Policemen often have to pay for their own things like guns and holsters and things that you would expect the police station would pick up, but they don’t. Teachers are always putting money out of their own pockets because they think their children need additional supplies or materials or things like that. And then, as Deborah mentioned, the deductions such as tax return preparation fees, investment fees, all these fall under miscellaneous itemized deductions, and unfortunately, we are going to be losing those completely in 2018 and beyond. So what we are recommending is to find what those expenses are and then pay them before year-end.

Deborah Jacobs: Uniforms and union dues, too. My bank, the employees buy their own uniforms.

Jim Lange: OK, good, good. So, Deborah, do you think it would be reasonable for somebody to take out, and we should refer people to your blog because I think it’s very good, but people should actually take out their 2016 tax return and go to Schedule A and just systematically say, “OK, what are some things that we should consider prepaying this year?” And can you tell us a little bit about that strategy, then tell us about your blog?


5. Miscellaneous Itemized Deductions Will Be Eliminated in 2018

Deborah Jacobs: Yeah, the blog is How to Guesstimate Your 2018 Taxes in Three Easy Steps, and what I suggest people do is take out the 2016 tax return — because that’s the last one you filed— look at your Form 1040, which is the first two pages of your tax return, and then if you itemized, look at your Schedule A and look at every item that you deducted and think about how it’s affected by the tax law. So these miscellaneous itemized deductions, which, it’s true that it was hard to get a lot juice out of them because they’re not deductible unless they exceed 2 percent of your adjusted gross income, but they do add up. So, if you had unreimbursable moving expenses and you’re moving again, that would be an item to consider. Education that wasn’t reimbursed by your employee, all the things that we do to advance our careers come under that section, as well as all the fees that we pay for financial advice, safe-deposit boxes, tax preparation, maybe you want to prepay your accountant who’s doing your tax return.

Jim Lange: Deborah, can you please give people the contact information for both you and your blog?

Deborah Jacobs: Yes. The blog you can find at, and at the top of the home page, there is a tab for blog and you just click on the blog, and this post is listed first on the page. It just went up today, and I can be contacted at

Jim Lange: All right, and the other thing that I will mention, as long as we’re plugging websites, I am literally working on the finishing touches of our year-end tax letter tonight, so if you look right now, it will not be up there, but it will be on our website at, and we will also be e-mailing that out to our e-mail subscribers, and if you wanted to get that, which will also tell you the future of the radio and how you can listen to us if you like hearing us, and I hope you do, you could go to, sign up for the newsletter, we send you a nice report that’s actually very useful as a little bonus, and we will send you the updated tax letter, as well as updates on the station.

So, Deborah, I want to circle back to something that you had said earlier, which was that you typically, for people who are salaried employees, they write down how many exemptions, and, based on the number they write down, the employer withholds more or less money, and one of the reasons why I wanted to bring that up is … and then, you also mentioned that we’re not going to get personal exemptions. So if you have eight kids and you are taking an exemption for all of them, you’re going to be hurt, and the increase in your itemized deduction won’t make up for it.

But the reason I wanted to go back to that is because if people do nothing and their tax rates go down, but it turns out that they end up with close to as big a tax liability because of the lost deductions, one thing that I fear is that in April 2019 that people who aren’t thinking about this are going to get a big tax hit. Do you have any recommendations for people who either are going to potentially experience this hit, or do you just think, hey, take advantage of the government’s money while you can, as long as you don’t have a penalty? But I did want to alert people because I think one of the problems is that people are going to say, “Oh boy, I got a bigger net check,” thinking that they’re in good shape, and then it turns out they can’t deduct a lot of the things that they used to deduct, and they end up with a liability and their reduced withholdings would not have been a good idea. Can you comment on that strategy and what, if anything, you’re telling your readers?


6. Use 2016 Tax Return, Schedule A, as ‘Scratchpad’ to Calculate 2018 Taxes

Deborah Jacobs: Well, this is exactly what I’m really, really worried about because, yes, if you’re getting a paycheck, your employer may be withholding less, your paycheck looks bigger, and then come tax time, which, for the 2018 tax year, is April of 2019, suddenly, you find you’re short. So, what I suggest in the blog post that went live today, How to Guesstimate Your 2018 Taxes in Three Easy Steps, is to use your 2016 tax return as a scratch pad, those three pages that I mentioned, the first two pages of the 1040 and then the Schedule A, the itemized deductions, and in particular, the Schedule A. Figure out what your itemized deductions are going to be for 2018 compared to what they were in 2016, and then the three easy steps. You subtract your itemized deductions from your income to get your taxable income, and then in the blog post, I link to the new tax tables where you can actually go and look up what your tax hit’s going to be, and based on that, you’ll be able to tell whether your paycheck is a little bigger, a little too big, shall we say, and if it is, you need to set aside a certain amount of each paycheck. Instead of saying, “Oh my goodness, this is great! I have more money to spend,” tag it in your bank account and your personal-finance software as for taxes because otherwise, come tax time, you may find yourself short.

Jim Lange: Well, I think that that’s very good advice. So why don’t we start to go through some of the itemized deductions point-by-point because there are certain things that people can do. You alluded to them when you went through the state and local income taxes versus different rules for real-estate taxes. So I think everybody gets the idea, OK, we want to accelerate our payment of these expenses. On the other hand, there are limitations. Well, one of the things that you mentioned was charitable donations, and I want to really talk about this one a lot because for a lot of people, this is important, and I think there’s two easy workarounds that I want to talk about.

7. Prepay Charity Deductions in 2017, Pay Them Out When and to Whom You Like

Jim Lange: So one of the things I want to talk about is prepaying charitable deductions. So, for example, there’s a number of charities that I always give to, and I know the amounts that I’m going to give, and I’ve actually been on the phone with two charities that I’m involved in. One is the United Jewish Fund. I’m actually on a professional advisory committee for the Jewish Foundation, but anyway, what I told them is that they should be encouraging their clients to make gifts, and then what they came back with, which was I think a very good idea, which I wanted to bring up and run by you, Deborah, is that there’s a lot of organizations. So, for example, the Jewish Pittsburgh Foundation and also just the Pittsburgh Foundation, and let’s say you don’t know which charities you’re going to write a check to, and you’re not sure about how much for each one, but you could actually write a check to, for example, the Pittsburgh Foundation in 2017, get the full deduction for it, and then pay it out whenever you see fit. So, I don’t know if that is one of the strategies that you’re using, Deborah, but I don’t want anybody to make charitable contributions and not get a tax deduction for it. Now, for some things, you’re not going to be able to predict it, but even if you can’t, I think that that might be one work around. Have you used that strategy before?

Deborah Jacobs: I love that strategy, and I’ve been recommending it for years, not just this year. In any year where somebody expects a slightly higher income in that year, I suggest that people offset the higher income by creating what you’re describing as a donor-advised fund, and they exist within community foundations like the Pittsburgh Foundation, the Philadelphia Foundation, where I’ve done programs for them to inform consumers about this strategy, and then there are commercial financial institutions like Fidelity and Vanguard that have donor-advised fund sections. A donor-advised fund, even if it’s contained within these financial institutions, it’s considered a separate charity. It’s a charity, you can make your donation, say, this year, it goes into a pot, you have then an account at that organization, whether it’s a community foundation or Fidelity or Vanguard, and I have no affiliations with either of them, and then you can direct … in future years where your donation is going to go. Some academic institutions have them as well, although a certain portion of the funds may have to go to the academic institution. You need to check what the rules are. But the gist of it is, is that if you contribute regularly to charity and your charitably inclined, you can make the donation this year to a donor-advised fund, take the full tax deduction this year and then decide in subsequent years who the charitable beneficiaries will be. You can use that to contribute to your college alma mater, to your favorite radio station, to your favorite art museum, to the symphony, whatever it is, and I have been for years recommending that strategy in conjunction with Roth IRA conversions, which cause a spike in your income in the year in which you do the conversion. So, I’ve been recommending that people use these two strategies together. But anyway, for this year, I think it’s a wonderful strategy for people who assume that going forward, they will probably not have enough deductions to itemize. They plan to continue giving to charity, and they don’t want to see that deduction go by the wayside. Of course, in a perfect world, we would all be generous even without a tax deduction. I think the charities are really worried that this is going to hurt giving, but for those of us who want to continue giving, I was talking about this with my husband last night, in fact, you know, should we set up a donor-advised fund now and consider it our pot for charitable donations for years ahead?

Jim Lange: Well, and I think that that’s good. Two other points on charitable giving. One, if you charge on your credit card before year-end, even if you pay it after year-end, it is considered a 2017 deduction. The other possibility, although you’re far too young, Deborah, but for our listeners who are 70 and older, what they can do is they can direct money from their minimum required distributions, called a qualified charitable deduction. So, let’s say, for discussion’s sake, that your normal minimum required distribution is $50,000, and let’s say that you want to give — just to keep the math simple — $10,000 to United Way. So you direct whoever’s holding your IRA to say, “Please give $10,000 directly to United Way,” and what happens is you don’t get a charitable deduction, but instead of having to pay income taxes on $50,000, you would only have to pay on $40,000. That has been a popular charitable technique for listeners who are 70 and older. That will still be available. So I did want to mention that before we left the area of charitable donations.

Deborah Jacobs: Yeah, should we also mention that this is a great year to make donations of marketable securities that have appreciated in value because the charity doesn’t pay tax when it sells those securities.


8. Avoid Capital Gains on Stock Sale by Donating the Stock to Charity

Jim Lange: OK, I think that that’s a very good point. In other words, instead of, for example, saying “Where am I going to get the money for a charity? Oh, I know, I’ll sell this highly appreciated stock. That’ll give me the cash. Then I’ll use the cash to pay the donation.” Deborah’s saying, “No, just give them the stock because, that way, you’ll avoid the capital gain, and they don’t care because they won’t have to pay a capital gain.”

Deborah Jacobs: Exactly.

Jim Lange: OK. All right, so the other one that might be a little bit tricky is, I want to talk about some of the specifics of state income taxes and local income taxes and real-estate taxes because you very appropriately said that there are differences in terms of how far ahead you could prepay. So why don’t we go first with state and local income taxes? Now, in Pennsylvania, we’re not going to be hit as hard as you are in New York with your monstrous state and local taxes, but why don’t we talk about the $10,000 limitation and what taxes you are allowed to pay ahead and what taxes you are not?

Deborah Jacobs: OK, so for those who are following along on their Schedule A or might want to pull out their Schedule A later, it’s the second big section of Schedule A and it’s labeled “Taxes You Paid,” and that’s where you list state and local income taxes and general sales taxes and real-estate taxes. Now, it’s these taxes total that are going to be capped at a $10,000 deduction starting in 2018. In terms of prepaying, you may prepay your real-estate taxes. You may not prepay the other ones. You can prepay your real-estate taxes for 2018 before December 31st. You may also pay in full whatever income taxes and sales taxes you’ll owe for 2017. You can pay them before the end of the year and have them count as a deduction for this year. What you may not do, and the new tax law is extremely explicit because they didn’t want anybody getting cute, you may not prepay your state and local income taxes for 2018.

Jim Lange: Right, but you can for real-estate taxes as you mentioned before, assuming the real-estate tax board in your locality is willing to accept that. Why don’t we go to medical expenses because there’s a change in medical expenses, and by the way, it happens to be hitting me personally at the moment. I’m actually doing this call from Panama. I’m actually here for stem-cell treatment, and for the bargain sum of $23,000 plus travel expenses, I am hoping that the stem cells I’m going to be receiving are going to reduce some of the problems that I’ve had with psoriatic arthritis, and between the travel and the expenses, I think all of which are deductible, it makes a lot more sense for me to pay these in 2017 rather than 2018. So, can you talk about the medical expenses, which ones you might want to prepay, and then also for some people, why it’s not easy is because the medical expense is actually going to have a lower threshold of 7.5 percent of adjusted gross income compared to the current 10 percent of adjusted gross income.

9. Threshold for Medical, Dental Expenses Will Be Lowered to 7.5% in 2018

Deborah Jacobs: Yeah, so let’s first talk about what the rule is. And it’s not just medical, but it’s also dental. You know, we tend to overlook that, but the category is medical and dental expenses. So, my husband went to the dentist last week and they said, “You need a crown.” I said, “Maybe you should get it before December 31st!” These can be deducted to the extent that they exceed 7.5 percent of your adjusted gross income if one spouse is over 65, and otherwise this year, they can be deducted if they exceed 10 percent of your adjusted gross income. Next year, the floor is going down for everybody, so it will be the same as it was if you or your spouse was 65 or older. So, it’s going to be 7.5 percent. You can deduct anything that exceeds 7.5 percent of your adjusted gross income. So the question is whether you’re meeting that threshold or close to meeting that threshold in 2017, in which case, you should push as many medical and dental expenses into 2017 as you can, or whether you’re going to be itemizing in 2018 because you might not be, and even if you’re not itemizing in 2018, the same rule as I talked about before, all the littler deductions will drop out. This is an item that you might not have enough to itemize, and therefore might not even benefit from it next year.
Certainly, Jim, you would, and wow, that’s quite a story. I hope it’s very successful in Panama. But anyway, this is something that is good to think about. I know, like, you know, a lot of doctors and dentists are about to take some time off for the holidays, but you might want to push those expenses into 2017, and the other thing to think about, of course, is your health insurance because if you’ve met your deductible for 2017 and you have some visits that you’re trying to decide whether to make them for 2017 or 2018, if you can still get appointments, you might want to crowd them into 2017 for that reason as well.

10. Health-Savings Accounts Won’t Be Affected by Loss of Deductions

Jim Lange: And also health-savings accounts, as long as we’re talking about different ways for medical. I am a big fan of health-savings accounts. They’re even better than Roth IRAs because you get a tax deduction going in and they grow not tax-deferred but tax-free, assuming that you’re taking the money out for medical expenses.
Well, anyway, I know we only have about seven minutes left, but I know some people missed the beginning of the show where we said that this is going to be our last show on KQV. I’m not going to go through the list of all the people who have been so helpful, but especially our guests and Dan Weinberg, who has just been instrumental and will presumably continue with us with a different station. Please do, if you are not already, get on my e-mail list, and then I will tell you where we are going to pick up. It will be presumably a different station, a different time. We will be sending out e-mail reminders like we have been. If you are on our list, we don’t want to lose you. We admire and enjoy doing business with KQV listeners. We’re not going to be able to communicate anymore, so please go to, sign up for the newsletter. We will also be sending you the updated year-end tax letter report that we are literally feverishly finishing, and frankly, I’ve got some ideas from Deborah tonight that I’m going to include in that letter, and the other thing, before we finish our last couple points, is Deborah has a very good blog that will help estimate your taxes and give you some guidance. So, Deborah, if you could please give the readers your blog, and then also, I like a number of your books, but why don’t you talk about the book that you are most excited about and tell readers how they can get ahold of that.

Deborah Jacobs: So, my blog is found on my website,, and the one I put up today, How to Guesstimate Your 2018 Taxes in Three Easy Steps, takes you through some of the things that Jim and I have been talking about. My book Estate Planning Smarts, now in the fourth edition, has an extensive chapter, Chapter 7, on tax planning with retirement accounts, which is an interest that I share with Jim. I’ll be coming out with a fifth edition of the book about six months from now, but meantime, all the information in Chapter 7 is still good information, and I also will be issuing a free downloadable update to the book to help people who need these services, or already have the book, between now and then. I’m most excited about my new book, which is called Four Seasons in a Day, which is about an innovative approach to downsizing. My husband is retired, I’m not, our only child is now in college, and for the past three falls, we’ve rented our townhouse in Brooklyn, New York, and moved our operation to France for three months, where we’ve lived on the proceeds while I continued working from overseas, and that’s also a very smart tax move because we’ve been in the house a long time. Like many homes in New York, it’s appreciated significantly in value, and so instead of selling the house and paying the capital gains tax on the sale, we are using the house to generate an income stream, which has been very helpful now that my husband is retired. So the book describes that strategy, but also the great adventures that have stemmed from it, and transitions, as I said to Jim, I’m a cockeyed optimist when it comes to transitions. I see the world as full of possibilities.
Do we have time for me to say just one more thing about those health-savings accounts that you mentioned, because I absolutely love them, and I think I’d like to say, if we have time, that those are not affected by the elimination and caps on various deductions because those are what’s called an “above-line deduction.” It goes on your 1040. It does not go on your Schedule A. So, you don’t have to be itemizing to take advantage of that.

Jim Lange: Well, I think that that’s very good, and I know Dan is anxious to close up, but I will just mention this: A lot of Pittsburghers don’t think that they can rent their house out very easily, because who the heck wants to come to Pittsburgh, but actually, a lot of people do. There’s a lot of professors from all over the world, and I actually did a home exchange with a French couple in France. So, some of Deborah’s ideas would work very well for Pittsburghers, and I think Dan is chomping at the bit. Is that right, Dan?

Dan Weinberg: That’s right. We’re just about ready to wrap up. Thanks so much to Jim and to our guest, Deborah Jacobs. And listeners, if you’d like to meet with Jim Lange in person, give the Lange Financial Group a call at (412) 521-2732 to see if you qualify for the Lange Second Opinion service. That’s (412) 521-2732. You can also connect with Jim’s office through his website at While you’re there at, you can check out all of our radio archives, all of our archived shows here at KQV, 180, 200, something like that, programs with some of the top names in investing and retirement planning, many of whom Jim mentioned early on in the program, and as Jim mentioned, this is our final new show here on KQV, and we’re going to keep you posted via as to where you can go to find us in 2018. As Jim mentioned, we are going to land hopefully somewhere else on the radio dial, and I want to thank Jim for this opportunity to work here on the show and I look forward to the next chapter with him, and if I may just take a little personal note here, I want to thank Bob Dickey Jr., KQV president, and before him, his dad Bob Dickey Sr., who hired me just out of college in 1997 as a writer then. I eventually went on to be a reporter and anchor here at KQV until 2014, and I want to thank them both for allowing me to have such great experiences and spend time with such great people here at News Radio 1410 for 17 years, and again, look forward to our next radio landing spot in 2018. For now, I’m Dan Weinberg. For Jim Lange, thanks so much for listening to this edition of The Lange Money Hour, Where Smart Money Talks.