The tax-reform legislation that kicked in for 2018 is an important measure with significant reach, but it won't significantly alter most financial goals or strategies for mainstream Americans.

Granted, you won't be able to take certain deductions as in the past — and might not choose to itemize deductions at all — but basic decisions on investing, reducing debt and other money-focused activities remain the same.

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Homeownership still makes sense

New restrictions on property-tax and mortgage-interest deductions might put some homes out of the reach of potential buyers, but they aren't a game-changer on whether to buy or rent. Homeownership is still attractive for many reasons besides taxes, and even the tax benefits remain solid.

Mortgage interest mostly remains deductible (on new debts up to $750,000, down from $1 million), and property taxes are still deductible too (though capped at $10,000 a year when combined with state/local income taxes).

One key benefit didn't change: If you live in and own a home as your primary residence for at least two years (within the past five), you may avoid capital-gain taxes on most or all profits (up to $250,000 singles or $500,000 married couples). 

One proposal would have lengthened the period to five years within the past eight, but it was dropped. On how many other investments can you skirt some or all capital-gain taxes?

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Retirement plans still make sense

Investing in Individual Retirement Accounts, 401(k)-style plans and similar accounts remains on track.

To the extent you hold stocks or stock funds in these accounts, tax reform could make them more appealing, as lower corporate tax rates will make many companies more profitable and possibly give a lift to the economy.

One proposal floated during tax-reform discussions would have limited the amount of money that workers could put into 401(k) accounts on a pre-tax basis, requiring additional contributions to go in as after-tax "Roth" investments, but that idea was nixed.

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Still, the tax-reform process provided a reminder that policies and tax rates change over time. One way investors can buffer themselves against such changes is by holding both traditional and Roth retirement accounts, noted investment-firm T. Rowe Price in a commentary.

The company urged investors to consider putting more money into Roth accounts, from which withdrawals may be taken tax-free.

Whether young or old, with a lot or little to leave behind, there are things you can do now to make it easier on your family in case you die or are too ill or injured to speak for yourself.
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Estate planning remains the same for most

It still makes sense to have a will, to update beneficiary designations on retirement/insurance investments and to have health-care and financial powers of attorney, which allow trusted friends or relatives to make decisions on your behalf should you become incapacitated.

You also might want to utilize a trust or various direct-transfer documents (such as beneficiary deeds on Arizona homes). Tax reform didn't alter those considerations.

While there was talk of eliminating the estate tax, it didn't happen. However, the final reform legislation did double the exemption amount per person to roughly $11 million from around $5.5 million, affecting a small number of multimillionaires. Most people weren't going to face an estate tax anyway. Even fewer will now.

As previously was the case, "Beneficiaries will still get a step-up in basis, meaning there would be no capital-gains tax due on inherited assets at the time of the transfer," noted Fidelity Investments. An investment's cost "basis" is that portion of its value on which taxes don't apply, so stepping up or increasing the basis reduces any tax bite.

Balance transfer cards allow you to move high-interest credit card debt and can save you money and inch you closer to a prosperous new year.
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Reducing personal debt remains a wise strategy

The tax-reform measure doesn't alter the wisdom of getting your financial house in order.

Credit-card debts, for example, weren't deductible before, and that remains the case. If anything, debt makes less sense from a tax standpoint because interest no longer can be deducted on home-equity loans.

Getting rid of credit-card and other debt remains a popular New Year's resolution this year, as in the past. 

As more people go back to work and consumer confidence rises, borrowing also has been on the increase. The amount of available credit, the number of credit-card accounts and average debts all have been increasing in recent years, said the Consumer Financial Protection Bureau in a recent report.

Among financial resolutions for the coming year, saving more money and paying off credit-card debt were the two goals that garnered the most responses in a consumer survey by credit-bureau Experian.

If some of your debt is medical-related, here's a bit of good news: Compared to the prior rule that medical expenses could be deducted only to the extent they exceeded 10 percent of adjusted gross income, the new law lowers that to 7.5 percent in 2017 and 2018, allowing more health-care costs to be written off.

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Basic insurance considerations remain intact

People still need homeowners, automobile and other types of insurance that provide protection against casualty losses. The tax legislation doesn't fundamentally alter that.

If anything, property-casualty insurance arguably becomes more important as the new legislation eliminates the previous ability to deduct unreimbursed losses from a flood, fire, burglary or other mishap.

Going forward, "Personal-casualty losses would no longer be deductible, other than those attributed to a disaster as declared by the president," noted Tim Steffen, a director of financial planning at private-wealth firm Baird.

The start of a new year is a good time to review insurance coverage including premiums, deductibles and possible discounts.

Reach Wiles at russ.wiles@arizonarepublic.com or 602-444-8616.