Community Manager
Community Manager
107 Comments (107 New)



An email was sent out on 08MAR18 with a link to this blog by mistake. The correct blog is located here.


Your tax situation may change for the 2018 year as a result of the new Tax Cuts and Jobs Act (TCJA).   


USAA believes you should be informed of how these changes may affect you and your family. Below, we’ve highlighted some of the changes that will impact individual taxpayers, as well as steps you may want to consider by the end of 2017. We strongly encourage you to consult with your tax and other advisors before taking action.



  • Individual income tax rates: Most individuals will see rates go down. The new rates will sunset after 2025.
  • The standard deduction has nearly doubled, and many may no longer need to itemize their taxes. Personal exemptions are eliminated. These provisions will sunset after 2025.
  • State and local taxes: There is a new limit on deductions (capped at $10,000) for the total of property and sales or income taxes. This provision will sunset after 2025.
  • Alternative Minimum Tax (AMT): The exemption increases to $70,300 for single tax filers and $104,900 for joint filers. The phase-out threshold increases to $500,000 for single filers and $1 million for joint filers. This provision will sunset after 2025.

Actions to Consider by Year-end 2017:

  • Consider deferring income into 2018 if personal tax rate might decrease.
  • Consider accelerating charitable contributions to take full advantage of itemized deductions.
  • Consider making high-dollar purchases now to take advantage of higher sales tax deductions this year.
  • Consider prepaying 2018 property taxes in 2017 if it’s likely you won’t itemize in 2018. If you do expect to itemize, consider prepaying all but $10,000 of your 2018 property tax obligation. 
    • Update 28DEC17: On Dec. 27, 2017,  the Internal Revenue Service advised tax professionals and taxpayers that pre-paying 2018 state and local real property taxes in 2017 may be tax deductible under certain circumstances. The IRS release stated that, “In general, whether a taxpayer is allowed a deduction for the prepayment of state or local real property taxes in 2017 depends on whether the taxpayer makes the payment in 2017 and the real property taxes are assessed prior to 2018. A prepayment of anticipated real property taxes that have not been assessed prior to 2018 are not deductible in 2017. State or local law determines whether and when a property tax is assessed, which is generally when the taxpayer becomes liable for the property tax imposed.” Please refer to the IRS website for additional details.


  • The child tax credit will increase from $1,050 to up to $2,000 for children under 17 years of age and is subject to higher income phaseout limits. This provision sunsets after 2025.
  • Dependent tax credit: There is a new $500 tax credit for qualifying dependents age 17 and older. This provision sunsets after 2025.
  • 529 plans can now be used for K-12 education expenses. (up to $10,000 per student per year)

 Actions to Consider by Year-end 2017:

  • Evaluate how utilizing 529 funds for K-12 qualifying education expenses may affect your other short- and long-term education savings goals. It may be beneficial for you to delay payment of 2017 qualifying expenses into 2018 (however, consider the impact of late payment penalties).


  • The medical expense deduction threshold will be reduced to 7.5% of your adjusted gross income for 2017 and 2018, which means you’ll have a higher likelihood of being able to deduct future medical costs in those years. The threshold will be restored to 10% again in 2019.
  • The Affordable Care Act personal mandate will be repealed beginning in 2019, which means you will no longer be penalized for not having qualified health insurance.

 Actions to Consider by Year-end 2017:

  • Consider receiving medical care in 2017 or 2018 to take advantage of the lower threshold deduction. Also, consider where you are in meeting your health plan deductibles.


  • Deductible mortgage interest for new home purchases (beginning in 2018) of first or second homes is capped at loans of $750,000. Existing loans as of December 15, 2017 will not be affected. Loans under binding written contracts entered into prior to December 15, 2017 and that close prior to April 1, 2018 will also not be affected. This provision sunsets after 2025.
  • Deductible home equity loan interest: Deductions for home equity indebtedness is repealed.

Actions to Consider by Year-end 2017:

  • Evaluate accelerating a home purchase closing or home equity loan, if feasible.

Investments and Retirement

  • Recharacterizations of Roth IRA conversions end after the 2017 tax year.

 Actions to Consider by Year-end 2017:

  • A recharacterization of a Roth IRA conversion must be completed by December 31, 2017. Starting in 2018, this option is no longer available.
  • Conversions to Roth IRAs will continue to be available in 2018. Consider delaying until 2018 to convert to a Roth IRA since 2018 tax rates may decrease.
    • Update 18Jan18: Per the IRS, Roth IRA conversion made in 2017 may be recharacterized as a contribution to a traditional IRA if the recharacterization is made by October 15, 2018. Roth IRA conversion made on or after January 1, 2018, cannot be recharacterized. For details, see “Recharacterizations” in Publication 590, Contributions to Individual Retirement arrangements (IRAs) on the IRS website


USAA is here to help by providing additional information and guidance on your specific financial needs and

USAA’s Tax Center

Visit USAA’s Tax Center

for information and resources.

goals as we evaluate the impact of the tax bill in 2018 and beyond. We are committed to helping you make smart financial decisions all along the way.


Please feel free to add a question or comment below. You can also speak with an advisor by calling 800-531-8722.


For more information on The Tax Cuts and Jobs Act, visit


The contents of this document are not intended to be, and are not, legal or tax advice. The applicable tax law is complex, the penalties for non-compliance are severe, and the applicable tax law of your state may differ from federal tax law.  Therefore, you should consult your tax and legal advisors regarding your specific situation.




Update 27DEC17: Thank you for all of the comments and questions. We are currently reviewing them and we may reply either through this channel or we may send you a message through our messaging system. The Tax Cuts and Jobs Act contains many complexities that require careful consideration. As a reminder, we are not tax advisors so it’s important to consult with your tax advisor for your specific situation.

Wedge Antilles
Occasional Visitor

One of the recommendations here is to Consider prepaying * property taxes in 2017


How can one go about doing that if their mortgage is serviced by USAA and proporrty taxes paid from an escrow account?

If I simply paid my propoerty tax bill with a check, would USAA later refund the amount from escrow or would they pay the bill again?

Community Manager
Community Manager

Hi Wedge Antilles,


Thank you for reading the blog and for your question. You bring up an excellent question for those who escrow. Please contact the mortgage team at 1-800-531-8722 and ask if they are able to assist in making the payment. I would also contact the tax assessor in your county/state and see if the payment has to be received or postmarked prior to January 1st, and what amount might be deductible for the 2017 tax year. 



Occasional Visitor

The company I work for was sold and I was released. Along with entire staffi have a 401k I can move it next June is it smart to move to a Roth 401 g instead of to my new employer?

Community Manager
Community Manager

Hi Zing1,


Thank you for the question. It sounds like you are in a time of transition, and asking good questions. There are several options that may be available regarding your 401(k) plan, including those you mentioned. Which option may be best for you will depend on your personal financial situation. This may be a good time to review your 401(k) within your overall finances. Please feel free to discuss this in more detail with one of our financial advisors by calling 1-800-531-8722.




What will USAA do with existing Coverdell accounts, as contibutions will end in 2017? Will their be an opportunity to convert them to a viable product?


I thought that to deduct real estate taxes, they had to be owed and paid.  * real estate taxes are not yet owed.  Am I wrong?

New Member

All Misch. deductions are eliminated including, the deduction of the fees you charge to manage my assets. 

What is the solution for this issue?  (Increasing the standard deduction does not take care of the issue - my tax bite will increase.  do you plan to LOWER your fees fro 1% to 1/2 of 1%

Occasional Visitor

Good Morning

I have $27000 SSI income (for two joint), about $4000 pension and $12000 IRA (min Distribution) and some cap gains/dividends (about $1200).  Any change to the SSI taxable amounts?  Currently I pay no tax because all of SSI is not taxable * and the standard deduction is enough to cover the rest.



Occasional Visitor

As a retiree at age 71. Considder accelerating withdrawal from 401K. With my income I will have no taxes due so I can increase the amount I withdraw from my 401K. I will be transfering the amount into a USAA individual brokerage account the keep it invested. 

Occasional Visitor

Be sure to pay any estimated state income tax payments before * year end instead of in January *