Last Call on These Popular Tax Deductions

Tax Reform

For all people who haven’t filed your taxes yet, make sure to take advantage of these tax deductions while you still can!

The new tax reform law eliminated several popular tax breaks starting in tax year 2018 (the one you file in 2019) and the newly passed Bipartisan Budget Act of 2018 extended expired tax breaks through 2017. This means for people filing their 2017 taxes, it’s the last call on a number of commonly claimed tax deductions.

Here are 9 tax deductions to take advantage of when you file your 2017 taxes this year:

Personal Exemption: When you file your 2017 taxes, this is the last time you will get a tax deduction of $4,050 for yourself and your spouse (if you’re married) since the personal exemption is eliminated starting with 2018 taxes that you file in 2019. 

Miscellaneous Itemized Deductions: This includes deductions such as job search expenses, unreimbursed work expenses, gambling losses, investment expenses and tax preparation fees, exceeding 2% of adjusted gross income. This is your year to make sure you take these deductions!

Moving Expenses: You can still deduct your moving expenses for 2017, as long as the move was related to the start of work at a new workplace and you meet the time and distance test. Beginning in 2018, only members of Armed Forces on active duty are allowed to take advantage of these tax breaks.

Dependent Exemption: Make sure you get your money’s worth out of your couch-crasher this year. If you supported your boyfriend, girlfriend or friend in 2017, you can still claim them as a dependent for a $4,050 tax deduction this year. This is also the last year you can claim a dependent deduction for your kids or a relative you’ve been supporting.

Personal Casualty and Theft Losses: Personal casualty losses such as fires, storms, and thefts are currently considered an itemized deduction (above the 10% adjusted gross income threshold). For 2017, if you were a victim of Hurricane Harvey, Maria, Irma or the California Wildfires, you are also eligible to claim your casualty loss even if you don’t itemize your tax deductions.  Beginning in 2018, this tax deduction only remains for casualties incurred in a Federally-declared disaster.

Charitable Contributions: Don’t forget those donated bags of clothes you dropped off at Goodwill last year! If you typically itemize your tax deductions, you may now need to take the standard deduction since it has now doubled (12,000 single, 24,000 married filing jointly) so this may be the last year you can take additional itemized deductions like charitable donations.

Tax Extenders

The following are tax extenders which were retroactively extended for tax year 2017 as part of the Bipartisan Budget Act of 2018. The law includes special tax relief for certain disaster victims, the extension of expired tax extenders for 2017, and the extension of energy efficient tax credits.

Tuition and Fees: Were you a student in 2017? Well, you may be able to deduct your tuition, books, and other supplies, up to $4,000. Although this deduction may not be extended for tax year 2018, the following tax benefits for a college education to help curb costs still exist, including the American Opportunity Credit, Lifetime Learning Credit, 529 plans, Education Savings Accounts and the Student Loan Interest Deduction.

Mortgage Insurance Premiums: For you homeowners out there, this is an itemized tax deduction for the amount you paid for mortgage insurance, which was required by your lender. You can consider asking the mortgage company to drop the insurance if you have made timely payments for several years or possibly refinance the loan altogether.

Energy-Related Home Improvements: If you made energy-related adjustments to your home, such as energy-saving roofs, windows, skylights, and doors in 2017, these can be claimed for a credit for 10% of costs up to $500, or a specific amount from $50-$300This also includes residential energy property costs, like high-efficiency water heaters, air conditioning units, and furnaces for your principal residence. Going forward, homeowners can still take a credit of up to 30% of costs for solar panels and solar water heating type improvements through 12/31/2019, 26% if placed in service after 12/31/2019 and before 01/01/2021, 22% for systems placed in service after 12/31/2020 and before 01/01/2022.

Don’t worry about memorizing these tax deductions, or tax changes for 2018 taxes which you file in 2019. TurboTax has you covered. TurboTax will ask you simple questions about you and give you the tax deductions and credits you’re eligible for based on your entries. If you have more questions while doing your taxes, you can connect live via one-way video to a TurboTax Live CPA or Enrolled Agent to get your tax questions answered. A TurboTax Live CPA or Enrolled Agent can also review, sign, and file your tax return.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s