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11 tax deductions and other ways to cut your 2017 tax bill

With all the talk about the new federal tax law that went into effect in January, it's easy to forget about the old o...

Posted: Mar 6, 2018 1:19 PM

With all the talk about the new federal tax law that went into effect in January, it's easy to forget about the old one.

But it's the old tax code that governs the deductions, credits and other measures you can use to save money on your 2017 tax return due in April.

In fact, it may be your last chance to use some of them since the new law eliminated many.

Here are 11 deductions and other tax-trimming measures you shouldn't overlook:

1. Traditional IRA contributions

You have until April 17 to make a tax-deductible contribution to a traditional IRA and have it count for 2017. The most you can contribute for the year is $5,500 ($6,500 if you're over 50).

How much of your contribution will be deductible depends on your income and whether you have a retirement plan at work.

2. Head of household filing status

If your spouse left you and your children, but you're still technically married, you may be able to file for head of household status.

It gives you a more generous standard deduction and other benefits than filing single or as a married person filing separately, which many people in this situation do, said Andrew Phillips, director of The Tax Institute at H&R Block.

To qualify, your spouse must have been gone for the last six months of 2017. You must have an underage child whose main home for more than half the year was your home and for whom you may claim an exemption.

In addition, you must have paid for more than half the household expenses for the year and file a tax return separate from your absent spouse.

3. Moving expenses

If you had to move long distance for work last year, you're allowed to deduct any moving-related expenses unreimbursed by your employer or if you're self-employed.

You don't have to itemize to take this deduction. But note, this is your last chance to take it for the next 8 years, since the new law eliminates it through 2025.

Related: Is your paycheck being taxed enough? Check the new IRS calculator

4. Mileage

If you drive for work you may deduct a portion of the miles you log, as long as you meet certain criteria and itemize your deductions.

You may not, for instance, deduct the miles you rack up commuting to and from work.

For Uber, Lyft and other car-service drivers, you can count both the miles driven with a passenger, as well as the miles driven between passengers, Phillips said.

The only catch: The mileage deduction counts toward your "miscellaneous" deductions. To claim them, all your miscellaneous deductions combined must exceed 2% of your adjusted gross income. And only the portion above the 2% threshold will be deductible.

This deduction, like all miscellaneous deductions, is eliminated under the new law. So you might want to negotiate reimbursement terms with your employer going forward, said Chris Hardy, an enrolled agent and certified financial planner with Paramount Tax and Accounting in Suwanee, Georgia.

5. Other job-related expenses

There are a host of other work-related expenses that may be deductible if you're a salaried or wage employee, so long as your employer hasn't reimbursed you for them.

These include license fees, legal fees related to doing or keeping your job, tools and supplies for work, dues paid to your union and any professional societies, and uniforms.

Like the mileage deduction, however, job-related expenses are grouped in with miscellaneous deductions subject to the 2% rule.

Other miscellaneous deductions include tax preparation fees, legal fees for tax advice, and hobby expenses but only up to the amount of income you made off your hobby.

6. Gambling losses

If you enjoy wagering, you're allowed to deduct your losses but only up to the amount of your winnings for the year, and only if you itemize.

Related: Tax law, bonuses and raises: 5 things you need to know

7. Personal property taxes

If you itemize your deductions and live in a state that imposes an annual personal property tax based on the value of your car, you may deduct that tax on your federal return, Phillips said.

The tax is usually part of your yearly registration fee. Some of that fee may be based on the weight of your vehicle, but only the portion of the fee based on the value of your car is deductible, according to the IRS.

Going forward, you may still take this deduction, but it will be subject to a new $10,000 cap on all state and local tax deductions, which include income and property tax deductions.

8. Medical expenses

You can take this deduction if you itemize, and the new tax law made it a little easier to take, temporarily.

The general rule is that you may deduct any unreimbursed medical and dental expenses that exceed 10% of your adjusted gross income. But that threshold is lowered to 7.5% of AGI for tax years 2017 and 2018 only.

9. Reinvested dividends

If you sold a long-held stock or mutual fund in 2017, you'll owe tax on any capital gain, which is the difference between your purchase price (aka your "cost basis") and the price you sold the investment for.

But if you've been reinvesting your dividends all along, that money gets added to your cost basis, Hardy said.

And that will reduce the overall tax you owe on your capital gains.

10. Private mortgage insurance premiums

If you itemize deductions, you're allowed to deduct the PMI payments you made last year on loans taken out after 2006.

You only have to pay PMI if you put down less than 20% on the home you bought.

You can't take the deduction if your AGI is over $110,000.

This break had expired but was given a one-year extension under a recent spending deal passed by Congress.

11. Home equity interest

If you've taken out a home equity loan or line of credit, you may still deduct the interest you pay on it for 2017.

But per guidance from the IRS, from 2018 through 2025, you will only be able to deduct the interest if you use the money for home improvement.

Indiana Coronavirus Cases

Data is updated nightly.

Cases: 1005797

Reported Deaths: 16449
CountyCasesDeaths
Marion1353572119
Lake663011164
Allen57820801
Hamilton46296464
St. Joseph44311613
Elkhart35888509
Vanderburgh32214480
Tippecanoe27898258
Johnson25056445
Hendricks23854359
Porter22890365
Madison18724409
Clark18540252
Vigo17449303
Monroe15242199
LaPorte15124250
Delaware15043261
Howard14719289
Kosciusko12285147
Hancock11709175
Bartholomew11602180
Warrick11287189
Floyd11082215
Wayne10965253
Grant10051220
Morgan9457176
Boone8913116
Dubois8263131
Dearborn820893
Henry8200152
Noble8017106
Marshall7916135
Cass7528121
Lawrence7447171
Shelby7176119
Jackson697289
Gibson6584115
Harrison647591
Knox6418106
Huntington6385100
DeKalb630699
Montgomery6252110
Miami592298
Putnam580078
Clinton574971
Whitley564255
Steuben560676
Wabash5324104
Jasper529879
Jefferson510297
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Adams481576
Daviess4670114
Scott438574
Greene424496
Wells423088
Clay422060
White418164
Decatur4164102
Fayette406187
Jennings386661
Posey376644
LaGrange357678
Washington357651
Randolph344499
Spencer339543
Fountain334760
Sullivan328652
Starke316470
Owen314170
Fulton309467
Orange293564
Jay284145
Franklin265443
Perry265352
Rush261332
Carroll261133
Vermillion257754
Parke231126
Pike228843
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Blackford192642
Pulaski183457
Crawford159223
Newton157848
Benton150217
Brown146147
Martin138219
Switzerland134911
Warren121016
Union107016
Ohio84513
Unassigned0540

Ohio Coronavirus Cases

Data is updated nightly.

Cases: 1511760

Reported Deaths: 23616
CountyCasesDeaths
Franklin1636861666
Cuyahoga1457252442
Hamilton1050421416
Montgomery737101254
Summit614971105
Lucas56058912
Butler51383711
Stark464421056
Lorain35443584
Warren32687373
Mahoning30598675
Clermont28106326
Lake26907443
Delaware24114162
Licking23820287
Trumbull22742556
Fairfield22309246
Greene22212320
Medina21941311
Clark19757351
Richland18500285
Portage17857250
Wood17394221
Allen15905269
Miami15487299
Muskingum14737185
Columbiana13940269
Wayne13722265
Tuscarawas12643304
Marion11906175
Scioto11432161
Pickaway11346141
Erie10811181
Ross10532198
Lawrence9725153
Ashtabula9658200
Hancock9649150
Belmont9262206
Geauga8906157
Jefferson8531197
Huron8338141
Union816557
Washington8066138
Sandusky7790148
Athens773676
Knox7679141
Darke7618155
Seneca7306144
Ashland6917126
Auglaize678097
Shelby6493113
Brown633387
Crawford6245130
Defiance6162103
Mercer612893
Fulton599296
Highland596899
Madison592176
Guernsey583468
Logan582795
Clinton581191
Preble5692122
Putnam5301108
Williams526185
Perry516563
Champaign510372
Jackson506571
Ottawa484086
Coshocton478783
Morrow456656
Pike432763
Fayette427461
Hardin416678
Gallia416266
Adams415392
Van Wert369579
Henry362571
Holmes3619123
Hocking355579
Wyandot322261
Carroll300659
Paulding279147
Meigs263350
Monroe214854
Noble198946
Morgan193232
Harrison180143
Vinton165125
Unassigned05
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