With the tax filing deadline just a mere month and a half away, countless Americans will no doubt spend the next six weeks sifting through paperwork in an effort to get their returns in on time. But as you go about the process, be sure not to gloss over the lesser-known deductions you might be eligible to take on your 2017 return. Here are a few that should stay on your radar.
1. Educator expenses
It's fairly common for teachers to spend their own money on classroom supplies and the like. If you incurred out-of-pocket expenses in the course of your teaching job, it pays to dig up those receipts. That's because you can deduct up to $250 on your taxes for educator expenses. Best of all, this is one of the few deductions you can claim without itemizing.
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2. Home equity loan interest
If you paid interest on a home equity loan last year, you should know that you're allowed to deduct it in full as long as that loan didn't exceed $100,000. In fact, you'll especially want to claim that deduction on your 2017 return because you won't get the option to do so going forward. As part of the recent batch of tax changes, the home equity loan interest deduction was eliminated, which means that even if you have an existing loan, 2017 is the last year you'll get a tax break out of it.
3. Moving costs
Did you relocate for work purposes last year? If so, it pays to figure out what you spent on movers, storage, and packing supplies. That's because you're allowed to deduct your moving expenses on your taxes, provided you meet the following criteria: that your new job is at least 50 miles farther than the distance between your old home and former office, and that you work 39 out of the 52 weeks following your move. In fact, 2017 is actually the last year you can write off moving expenses on your taxes; the deduction was phased out over the course of tax reform.
4. Medical expenses
Racked up a host of medical bills last year? You wouldn't be alone. But here's some good news: If your total expenses surpassed 7.5% of your adjusted gross income (AGI), you can deduct the excess on your taxes. This means that if your AGI is $100,000, and you incurred $10,000 in out-of-pocket costs, you can deduct anything in excess of $7,500 -- in this case, $2,500. What sort of medical expenses are deductible? In addition to copays, equipment (such as wheelchairs or crutches), hearing aids, and vision aids, you can write off the cost of travel to and from appointments. And that could amount to quite a bit of tax savings.
5. Student loan interest
Countless adults continue to be plagued by student debt. If you're one of them, take comfort in the fact that you can deduct up to $2,500 in student loan interest, provided you don't make too much money. If you're a single tax filer with a modified adjusted gross income (MAGI) of $65,000 or less, you'll get to claim the full deduction, which phases out completely at $80,000. If you're filing a joint return and earn $130,000 or less, you'll also get a full deduction, with a phaseout at $160,000. Furthermore, the loan in question must be one you took out to pay for your own higher education costs, or those of a dependent or spouse. Additionally, your tax filing status can't be married filing separately, nor can you be claimed as a dependent on someone else's tax return. But if you meet these criteria, you'll lower your tax burden.
Whether this is your first time filing your taxes or your 10th, it pays to make the most of the deductions available to you. So spend a little time reading up on deductions this year, especially since a number of key tax breaks are going away. It'll end up being a more than worthwhile investment.
