You know that a new tax law took effect on Jan. 1, but do you know how to put it to use?

Here are key ideas you should discuss with your financial and tax advisors:

Do You Have a Home Equity Line of Credit (HELOC)?

If so, consider refinancing your mortgage. That’s because under the new tax law, interest paid on a HELOC generally is no longer tax-deductible. If you consolidate your HELOC into your primary loan, all the interest you pay might remain tax-deductible.

Even so, be aware that the standard deduction has been greatly increased (as noted below), so if you decide not to itemize in 2018, you won’t get any tax break for mortgage interest or for charitable donations. Talk with your tax advisor to see how this might affect the benefit of refinancing to eliminate your HELOC.

Are You Contributing the Maximum to Your Workplace Retirement Plan?

You can now contribute up to $18,500 to your retirement plan at work — plus $6,000 more if you’re age 50 or older. Talk with your HR department to increase your withholdings now.

Planning to Make Donations to Charity?

Consider donating appreciated securities instead of cash. That will let you avoid the capital gains tax while still getting a tax deduction on your gift — and the charity will still get all the money. And if you’re age 70½ or older, consider making charitable contributions directly from your IRA.

Should You Itemize Your Expenses or Take the Standard Deduction?

The standard deduction has been nearly doubled — to $12,000 for single filers and $24,000 for couples filing jointly. As a result, you might pay less tax by using the standard deduction instead of taking deductions based on your actual tax-deductible expenses. Consider this:

  • The maximum you can deduct for state and local taxes and property taxes is now $10,000. (There used to be no limit.)
  • You can no longer deduct expenses that used to be deductible, including the following:

- Moving expenses (except for members of the military).

- Unreimbursed business expenses.

- Tax preparation and investment advisory fees.

Talk with your tax advisor to see whether you should itemize for 2018.

In Future, Don't Wait to File Your Taxes

For the past 10 years or so, we’ve advised you to delay filing your tax return until March. That’s because the mutual fund industry regularly issued amended 1099 forms late into the tax season. Those who filed early in the year often found themselves forced to file amended returns — a nuisance at best, and costing extra money at worst. By delaying your filing, you reduced that risk.

However, the fund industry has vastly improved its accuracy. Amended 1099s have become far less common. Meanwhile, the Equifax privacy breach has increased the risk that a crook might file a fake tax return in your name. That risk now outweighs the possible inconvenience and cost of filing an amended return.

Therefore, we have changed our advice: We now encourage you to file your return as quickly as possible. (And it’s best to owe the IRS money instead of expecting a refund. This further reduces your exposure if a scammer does file a fake return in your name.) As with all tax matters - not just for the new tax laws - please consult your tax advisor before taking any action.