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

Here are 11 deductions and other tax-trimming measures you shouldn't overlook when filing your taxes.

Posted: Apr 14, 2018 12:52 PM

(CNN Money) -- 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, which are due on Tuesday, April 17.

In fact, this 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.

Doing so 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 still be able to deduct the interest but only if you use the money for home improvement.

Terre Haute
Clear
68° wxIcon
Hi: 84° Lo: 58°
Feels Like: 68°
Robinson
Clear
64° wxIcon
Hi: 82° Lo: 57°
Feels Like: 64°
Indianapolis
Clear
73° wxIcon
Hi: 82° Lo: 60°
Feels Like: 73°
Rockville
Clear
63° wxIcon
Hi: 82° Lo: 59°
Feels Like: 63°
Casey
Clear
68° wxIcon
Hi: 82° Lo: 60°
Feels Like: 68°
Brazil
Clear
68° wxIcon
Hi: 82° Lo: 59°
Feels Like: 68°
Marshall
Clear
68° wxIcon
Hi: 83° Lo: 58°
Feels Like: 68°
Sunny and warm!
WTHI Planner
WTHI Temps
WTHI Radar

WTHI Events

 

Illinois Coronavirus Cases

(Widget updates once daily at 7 p.m. CT)

Confirmed Cases: 155048

Reported Deaths: 7388
CountyConfirmedDeaths
Cook955574725
Lake10378428
DuPage9719486
Kane8107281
Will7278326
Winnebago3169106
St. Clair2304144
McHenry2266102
Kankakee143166
Madison119870
Rock Island119430
Unassigned1185201
Kendall106323
Champaign104017
Peoria66630
DeKalb64220
Boone63721
Sangamon53133
Jackson35619
McLean32215
Randolph3157
Ogle3144
Stephenson2856
LaSalle25917
Macon25322
Clinton24616
Union21219
Whiteside21215
Grundy1945
Coles19117
Iroquois1755
Tazewell1758
Knox1700
Adams1691
Williamson1614
Monroe15913
Warren1490
Cass1409
Morgan1344
Henry1161
Jefferson11417
McDonough10815
Lee1072
Vermilion892
Pulaski840
Marion770
Montgomery741
Macoupin693
Douglas610
Perry611
Jo Daviess551
Livingston552
Christian514
Woodford482
Jasper477
Franklin460
Jersey431
Ford421
Clark410
Bureau372
Menard320
Effingham311
Cumberland290
Mercer290
Johnson260
Alexander250
Washington250
Fayette243
Mason240
Moultrie240
Wabash230
Bond222
Carroll212
Hancock211
Logan210
Piatt210
Crawford200
Shelby201
Edgar190
Wayne191
De Witt180
Saline170
Fulton160
Massac160
Schuyler130
Lawrence120
Marshall120
Brown100
White100
Greene90
Richland90
Henderson80
Hamilton70
Pike70
Gallatin60
Stark60
Clay50
Edwards50
Calhoun10
Hardin10
Pope10
Putnam10
Scott10
Out of IL00

Indiana Coronavirus Cases

(Widget updates once daily at 8 p.m. ET)

Confirmed Cases: 51612

Reported Deaths: 2760
CountyConfirmedDeaths
Marion12074693
Lake5650249
Elkhart361860
Allen2952134
St. Joseph214869
Hamilton1708101
Cass16459
Hendricks1466100
Johnson1345118
Porter84038
Tippecanoe7799
Vanderburgh7686
Clark71144
Madison67864
LaPorte62328
Howard60758
Bartholomew60145
Kosciusko5824
Marshall5579
Noble52028
Boone49144
LaGrange48610
Jackson4783
Delaware47552
Hancock46836
Shelby45925
Floyd41444
Monroe34828
Morgan34531
Grant32226
Dubois3096
Montgomery29820
Henry29618
Clinton2903
White27610
Dearborn26523
Warrick26129
Vigo2588
Decatur25632
Lawrence25225
Harrison21822
Greene19632
Miami1942
Jennings17912
Putnam1738
DeKalb1694
Scott1659
Wayne1586
Daviess15117
Perry14910
Steuben1382
Orange13723
Jasper1362
Ripley1347
Franklin1288
Gibson1242
Wabash1163
Carroll1142
Starke1083
Whitley1076
Fayette1067
Newton10110
Huntington942
Jefferson872
Wells821
Randolph804
Fulton731
Jay720
Knox710
Washington681
Pulaski661
Clay645
Rush623
Posey610
Spencer571
Owen521
Benton510
Sullivan501
Adams491
Brown431
Blackford402
Fountain362
Crawford330
Switzerland320
Tipton321
Parke270
Martin260
Ohio230
Vermillion200
Warren151
Union140
Pike120
Unassigned0193