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 statute by President Donald Trump in December eliminates some allowances, replacing them with higher standard allowances. The 2017 standard deduction for single filers is $6,350, but it’ll be increased to $12,000 in 2018. The standard deduction for married couple filing collectively will rise from $12,700 to $24,000.
The expectation is that next year this will encourage 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 deductions 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 deduct for 2017.
Did you make a big buy in 2017, like a vehicle or new home appliances? If you file a Kind 1040, and itemize deductions on Schedule A, you have the option of claiming either country and local income taxes, or nation and local sales taxes( you can’t assert both ). If you saved your receipts throughout the year, you can add up the total amount of sales tax you paid and claim that amount. The IRS provides a calculatorto help you decide which is more advantageous for you.
Things that uniquely benefit 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 deduct the body petroleum he used in competitor. TurboTax noted in a blog post that a junkyard owner could deduct the cost of cat food that encourages stray cats to hang around and keep the mice and rats away. A stripper was allowed to subtract the cost of her breast expansion surgery.
Gone in 2018 will be any deductions for unreimbursed employee expenses.
Health insurance premiums.
Deductible medical expenses have to exceed 7.5 percent of your adjusted gross income to be claimed as an itemized deduction 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 allowance, 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, run, run in 2018 — although you might still get a break for loss in federally proclaimed disaster areas. In the meantime, you are able to thank Hurricane Irma for coming in 2017, at least from a tax deduction view, because you can still declare loss this round.
More charity than you think.
You probably know that the money you give to a recognise charity can be deducted. Same is true of your donations of goods to charity thrift stores. But don’t forget about the cookies you baked for the school fundraiser( the cost of the ingredients qualify as allowances) and the old towels you dropped off at the animal shelter. You can also subtract the cost of the babysitter you hired when you volunteered to walk the dogs there.
Finding and getting a job.
Expenses related to finding a job are sometimes deductible. If you’re attempting work in the same field and your job-hunting expenditures surpass 2 percent of your adjusted gross income, you can deduct them. Travel to interviews, mileage, the cost of printing your resume and committee paid to a recruiter are all eligible expenses. And should you land a undertaking, you are able to deduct the costs of relocating — not just yourself, but their own families, pets included. Note to recent college graduates: This deduction does not apply to first jobs . But once you get a job, you are able to deduct your union dues( presuming you paid them in 2017 ).
The two regulations here are: The clothes must be a requirement of the job — uniforms for police and firefighters, health care workers, letter carrier, waiters, for example — and the outfit cannot be something suitable for personal wear — a clown dres, perhaps? Those who perform in the amusement field can subtract what they wear. Dry cleaning costs for this are also deductible.
Home office expenses.
Many taxpayers fear that claiming a home office allowance will trigger an audit. Truth is, in recent years, the IRS has built it easier to claim the deduction by introducing the new simplified method of deducting expenses.
To claim the American Opportunity Credit, you must have paid educational expenditures either for yourself, your spouse, or for one of your dependents at an eligible post-secondary organization. Expenditures include tuition, fees, textbooks, and class supplies.
This is a direct dollar-for-dollar credit for the first $2,000 of eligible expenditures. After that, you are able to recoup 25 percent of the next $2,000 in eligible expenses up to a maximum of $2,500. The credit first offsets your tax liability, after which up to $1,000 of this credit may be refunded to you. To be eligible, your adjusted gross income must be less than $90,000 if filing single, or $180,000 or less if married filing jointly. The amount of the credit you can claim phases out if your adjusted gross income surpass $ 80,000, or $160,000 for joint filers.