Live it up on the tax deductions you claim when you file your federal income taxes this year, because you may not be able to claim many of them for 2018.
The tax reform bill signed into law by President Donald Trump in December removes some deductions, replacing them with higher standard allowances. The 2017 standard deduction for single filers is $6,350, but it’ll be given to $12,000 in 2018. The standard deduction for married couple filing jointly will rise from $12,700 to $24,000.
The expectation is that next year this are contributing to more taxpayers to take their new standard deductions and simplify the tax-filing procedure — the infamous “file your taxes on a postcard” idea. Even the allowances that survived Trump’s bill will be claimed less often, since people will have to reach a higher threshold to itemize at all.
Here are a few things you may not realize you still can subtract for 2017.
Did you make a big purchase in 2017, like a automobile or new home appliances? If you file a Sort 1040, and itemize deductions on Schedule A, you have the option of claiming either nation and local income taxes, or nation and local sales taxes( you can’t claim both ). If you saved your receipts throughout the year, you can add up the total amount of sales tax you paid and assertion that amount. The IRS renders a calculatorto help you determine which is more advantageous for you.
Things that uniquely advantage your business.
There are a multitude of things that can be deducted if you are able to show how they benefited your business. A freelance journalist can claim a deduction for a cable news subscription. A bodybuilder can withhold the body petroleum he used in tournament. TurboTax noted in a blog post that a junkyard owner could subtract the cost of feline meat that encourages stray cats to hang around and keep the mouse and rats away. A stripper was allowed to deduct the cost of her breast enlargement surgery.
Gone in 2018 will be any deductions for unreimbursed employee expenses.
Health insurance premiums.
Deductible medical expenditures have to outperform 7.5 percent of your adjusted gross income to be claimed as an itemized allowance for tax years 2017 and 2018. However, if you’re self-employed and responsible for your own health insurance coverage, you might be able to deduct 100 percent of your premium expense.( This is technically not an itemized deduction, since it gets taken off your adjusted gross income, but we didn’t want our friends who work in the gig economy to miss out on this one .)
Theft and personal casualty losses.
These will be gone, gone, moved in 2018 — although you might still get a break for losings in federally declared disaster area. In the meantime, you can thank Hurricane Irma for coming in 2017, at the least from a tax deduction view, because you can still declare losings this round.
More charity than you think.
You likely know that the money you give to a acknowledged charity can be deducted. Same is true of your donations of goods to charity thrift stores. But don’t forget about the cookies you cooked for the school fundraiser( the costs of the ingredients qualify as deductions) and the age-old towels you dropped off at the animal shelter. You can also subtract the costs of the babysitter you hired when you volunteered to stroll the dogs there.
Finding and getting a job.
Expenses related to finding a job are sometimes deductible. If you’re trying work in the same battleground and your job-hunting expenses surpass 2 percent of your adjusted gross income, you can withhold them. Travel to interviews, mileage, the cost of printing your resume and board paid to a recruiter are all eligible expenses. And should you land a task, you can still withhold the costs of relocating — not just yourself, but their own families, pets included. Note to recent college alumnus: This deduction does not apply to first jobs . But once you get a job, you can subtract your union dues( accepting you paid them in 2017 ).
The two rules here are: The clothes must be a requirement of the job — uniforms for police and firefighters, health care workers, letter carriers, waiters, for example — and the outfit cannot be something suitable for personal wear — a clown garb, perhaps? Those who perform in the recreation realm can withhold what the hell is wear. Dry cleaning costs for this are also deductible.
Home office expenses.
Many taxpayers fear that claiming a home office allowance will trigger an inspection. Truth is, in recent years, the IRS has attained it easier to claim the deduction by introducing the new simplified method of withholding expenditures.
To claim the American Opportunity Credit, you must have paid educational expenses either for yourself, your spouse, or for one of your dependents at an eligible post-secondary institution. Expenses include tuition, fees, textbooks, and class supplies.
This is a direct dollar-for-dollar credit for the first $2,000 of eligible expenses. After that, you can recoup 25 percent of the next $2,000 in eligible expenses up to a maximum period of $2,500. The credit first offsets your taxation liability, after which up to $1,000 of this credit may be refunded to you. To be eligible, your adapted gross income must be less than $90,000 if filing single, or $180,000 or less if married filing collectively. The quantity of the credit you can assertion phases out if your adjusted gross income outstrips $ 80,000, or $160,000 for joint filers.