It’s almost tax season again! Before you file, it might be a good idea to do some research about the changes that we can expect to see from the Tax Cuts and Jobs Act. If you itemize and plan to continue doing so, it’s worth your time to find out what has changed.
While your tax bracket and some itemized deductions could be changing, there will still be many applicable deductions available to many Americans who itemize. Here are 10 tax deductions not to miss out on this year, since some of them will be eliminated or changed next year.
First time homeowners (and homeowners with mortgages of less than $750,000) will be excited to learn that mortgage interest is still tax deductible.
Residents of most states pay taxes to their state and local governments. While there used to be no limit to the amount of deductible state and local taxes, that amount is now capped at $10,000. So if you pay less than that in state and local taxes, expect to see no changes here.
Charitable contributions will be changing and can get a little complicated, as they involve planning out deductions for multiple years, but you may still be able to deduct them.
Previously, a person could deduct the cost of medical expenses if they exceeded 10 percent of the person’s adjusted gross income. The new tax bill lowers it to 5 percent.
Child tax credit
The child tax credit is preserved in the new tax bill, and may look even more attractive to parents this coming tax year, as the deductible amount per child has increased.
Casualty and theft losses in disaster areas
After the tax year 2017, casualty and theft losses will not be eligible for deduction except in areas declared to be emergency disaster areas by the president. For 2017, this will include areas such as Texas, Puerto Rico, and others affected by disaster.
If you’re one of the parents who has a 529 plan to help your child save for college, it will be a relief to know that this is still tax deductible for this year. Furthermore, these funds may be available for use beyond just college and may be applicable towards other education costs, such as a private elementary school.
Sales tax is tax deductible, but if you deduct state and local income tax, you can’t claim this deduction. If you live in a state with no income tax but high sales taxes, this deduction may be useful to you.
A survey of school teachers found that 99.5 percent of them reported spending an average of just under $1000 per school year on school supplies. If you’re a teacher, this is a large part of your salary. Educators who spend their own income on school supplies for their classrooms (notebooks, pens, pencils, etc.) can deduct those costs.
Self-employment Social Security
Those who are self employed are still required to pay into Social Security. The good news is that, just like many corporations, part of this is tax deductible.