Your 2017 income tax return is the last chance to claim a number of federal income tax deductions that the tax overhaul killed off.
Still, many deductions for individual taxpayers survived the Tax Cuts and Jobs Act, which is now the tax law of the land. So, when you file 2018 taxes a year from now, those deductions will be available to you.
Federal income deductions that weren’t killed off by the tax overhaul met one of three main fates. They were left as is, or modified for the better or the worse.
The Tax Institute at H&R Block reports that deductions left untouched include those for:
- Contributions to traditional individual retirement accounts (IRAs)
- Contributions to health savings accounts (HSAs)
- Interest on student loans (up to $2,500)
- Expenses of K-12 educators (up to $250 for unreimbursed classroom supplies)
- Expenses of self-employed workers (including self-employment taxes, health insurance and retirement plan contributions)
Deductions that have been scaled back include those for:
- State and local taxes totaling no more than $10,000 (for married taxpayers filing joint returns).
- Interest on new mortgages totaling no more than $750,000 (for joint returns) — see “3 Costly Ways Homeowner Tax Breaks Will Change in 2018.”
Deductions that have been expanded, and their thresholds for 2018, include those for:
- Charitable contributions totaling up to 60 percent of your taxable income.
- Medical expenses that exceed 7.5 percent of your taxable income — but the threshold will revert to the pre-overhaul threshold of 10 percent in 2019.
What’s your take on tax deductions under the new tax code? Sound off below or on our Facebook page.