4 Major Tax Deductions Most Americans Foolishly Pass Up

no cash
Photo by charnsitr / Shutterstock.com

Many taxpayers are apparently giving Uncle Sam more of their hard-earned money than necessary.

Americans are not taking advantage of some big tax deductions that they believe to be illegal, according to a recent NerdWallet survey.

More than 2,000 adults in the U.S. were polled for the survey, which was conducted by Harris Poll.

The survey identified several valid federal income tax deductions that few folks claim. Specifically, only 16 percent of Americans who have filed taxes have taken advantage of any of these methods for landing — or increasing — a deduction:

  • Making an extra mortgage payment
  • Contributing to a traditional IRA after Dec. 31 but before the tax deadline (which is April 17 this year)
  • Delaying income to the next tax year
  • Combining a vacation with a business trip and then deducting the unreimbursed business expenses

Let’s take a closer look at one of those deductions available to many people — because you could be losing out on a lot of savings if you are eligible but pass it up.

NerdWallet found that 75 percent of folks believe it’s illegal to claim a tax deduction for contributing to an IRA after the end of the 2017 calendar year, but before the end of the tax year. Contributions to Roth IRAs are not tax-deductible but those to traditional IRAs are legally deductible, provided you follow the IRS’ rules for the deduction.

In fact, putting money in a traditional IRA any time before the 2017 tax deadline can lower your household’s 2017 taxable income by up to $6,500 per person.

Additionally, it can help you build up retirement savings. If you are just getting started building a nest egg, check out:

For more news and tips for the current tax-filing season — including other legal deductions — check out our 2018 tax coverage.

What’s your take on this news? Were you aware that the five above deductions are legitimate? Let us know below or on our Facebook page.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Read Next
Secret Ways to Save on Netflix
Secret Ways to Save on Netflix

These little-known savings tactics can help whittle down what you pay for your streaming video subscription — every month.

The Worst Nursing Homes in America Are Revealed
The Worst Nursing Homes in America Are Revealed

The nursing homes with a history of providing subpar care previously hadn’t been identified for a government list.

7 Things You Should Buy at Estate Sales
7 Things You Should Buy at Estate Sales

Here’s what an experienced estate sale shopper considers a great find.

9 Products That Will Organize Your Home for Under $45
9 Products That Will Organize Your Home for Under $45

These clever Amazon finds can help transform a messy nest into the pristine home of your dreams.

10 Ways to Nail Savings on Your Remodeling Project
10 Ways to Nail Savings on Your Remodeling Project

Here’s how to save on your next remodeling project with discounted materials and more tips and tricks.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
11 Things Retirees Should Always Buy at Costco
11 Things Retirees Should Always Buy at Costco

This leader in bulk shopping is a great place to find discounts in the fixed-income years.

Over 50? The CDC Says You Need These 4 Vaccines
Over 50? The CDC Says You Need These 4 Vaccines

Fall is the time to schedule vaccines that can keep you healthy — and even save your life.

9 Things You’ll Never See at Costco Again
9 Things You’ll Never See at Costco Again

The warehouse store offers an enormous selection, but these products aren’t coming back.

11 Senior Discounts for Anyone Age 55 or Older
11 Senior Discounts for Anyone Age 55 or Older

There is no need to wait until you’re 65 to take advantage of so-called “senior” discounts.

8 Things You Can Get for Free at Pharmacies
8 Things You Can Get for Free at Pharmacies

In this age of higher-priced drugs and complex health care systems, a trip to the pharmacy can spark worry. Freebies sure do help.

These Are the 4 Best Medicare Advantage Plans for 2020
These Are the 4 Best Medicare Advantage Plans for 2020

Medicare Advantage customers themselves rate these plans highest.

The 10 Most Commonly Stolen Vehicles in America
The 10 Most Commonly Stolen Vehicles in America

A new model parks atop the list of vehicles that thieves love to pilfer.

11 Household Items That Go Bad — or Become Dangerous
11 Household Items That Go Bad — or Become Dangerous

When you get the impulse to stockpile these everyday items, pay close attention to their expiration dates.

7 Ways to Boost Your Credit Score Fast
7 Ways to Boost Your Credit Score Fast

Your financial security might soon depend upon the strength of your credit score.

19 High-Paying Jobs You Can Get With a 2-Year Degree
19 High-Paying Jobs You Can Get With a 2-Year Degree

These jobs pay more than the typical job in the U.S. — and no bachelor’s degree is required.

5 Ways to Get Amazon Prime for Free
5 Ways to Get Amazon Prime for Free

Hesitant to drop $119 a year on an Amazon Prime membership? Here’s how to get it for free.

10 Reasons Why You Should Actually Retire at 62
10 Reasons Why You Should Actually Retire at 62

If you can, here are several good reasons to retire earlier than we’re told to.

3 Ways to Get Microsoft Office for Free
3 Ways to Get Microsoft Office for Free

With a little ingenuity, you can cut Office costs to zero.

14 Things That Are ‘Free’ With Medicare
14 Things That Are ‘Free’ With Medicare

These services could save you money and help prevent costly health problems.

5 Keys to Making Your Car Last for 200,000 Miles
5 Keys to Making Your Car Last for 200,000 Miles

Pushing your car to 200,000 miles — and beyond — can save you piles of cash. Here’s how to get there.

26 States That Do Not Tax Social Security Income
26 States That Do Not Tax Social Security Income

These states won’t tax any of your Social Security income — and in some cases, other types of retirement income.

5 Things That Make Life More Meaningful for Retirees
5 Things That Make Life More Meaningful for Retirees

Retirees agree: These are the things that give them purpose and fulfillment in their golden years.

10 Things You Should Never Do With Bleach
10 Things You Should Never Do With Bleach

Does the pandemic have you reaching for bleach more than ever before? Learn the ins and outs of using this powerful disinfectant.

15 Amazon Purchases That We Are Loving Right Now
15 Amazon Purchases That We Are Loving Right Now

These practical products make everyday life a little easier.

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.