5 Ways to Lower Your Taxes Before 2017 Is Over

No one likes paying more than their share of taxes.  As a result, we’d all be wise to do a little family tax planning as the year goes along, but as the saying goes “time waits for no man.” Heck, can you believe it’s already November?!

For the wannabe tax-saver in you, here are 5 steps you can take today to potentially lower your taxes. There are many types of deductions available, but the one’s I’ll mention here are, I believe, some of the most “actionable.”

Some of these deductions can also be claimed for the 2017 tax year even after 2017 is through. While this approach is fine, I find it helpful to get people thinking about them now so they can take action before the busyness of the holiday season and 2017 is quickly forgotten (“Should Old Acquaintance be forgot, and never thought upon…”)

Without further delay, here are 5 ways you might lower your 2017 taxes.

(Editor’s Note: I’m not a CPA or a tax professional. Some of these strategies may apply to you, but it’s a great idea to check with a CPA depending on your unique financial situation.)

Above the Line Deductions

Tax deductions that lower your Adjusted Gross Income (AGI), present a unique financial opportunity. I previously discussed why Above the Line Deductions can be so powerful.

The first three items below are the most common Above the Line Deductions. Many Americans have access to them, and using them before the year is through can have a big tax impact.

1. Health Savings Account

For many company employees and the self-employed, Health Savings Accounts are an option. These accounts are only available if your health insurance is considered a “High Deductible Health Plan” (a plan with a minimum deductible of $2,600 in 2017).

Health Savings Accounts, or HSAs, allow you to contribute up to $6,750 per year for a family. The funds can be invested if you choose and they grow tax-free, and withdrawals are tax-free as long as they are used for eligible medical expenses. That's a triple tax benefit. 

2. Traditional IRA

If you are currently covered by an employer-sponsored retirement plan like a 401k, then Traditional IRA contributions will be limited depending on your AGI. However, if you are not covered, then you are not limited. You can make the full 2017 Traditional IRA contribution of $5,500 per person.

Funds that are contributed to a Traditional IRA are tax deductible and qualify as an Above the Line Deduction, lowering your AGI. Funds in an IRA can be invested in a variety of products, like mutual funds. Once the funds are withdrawn in the future, you’ll pay the taxes owed.


SEP and SIMPLE IRAs are typically the lesser-known retirement plans, but for small business owners they can provide a big tax benefit.

A Simplified Employee Pension IRA, or SEP IRA, allows an employer to make tax deductible contributions for all of their employees. These contributions, a tax deduction to the business, are up to 25% of their salary or $53,000 in 2017, whichever amount is less. The employees don’t make any of their own contributions.

A SIMPLE IRA is kind of like a 401k where both employees and the employer makes tax deductible contributions. Employers must either give each employee a 2% non-matching contribution or up to a 3% matching contribution. SIMPLE IRAs are nice for small businesses because they don’t carry the administrative or regulatory costs of a 401k plan.

Below the Line (Itemized) Deductions

Not all tax deductions are created equal. Below the Line or Itemized Deductions are often the one’s more commonly thought of. While their impact may not be as strong compared to Above the Line Deductions, they still result in a reduction of your taxable income.

Itemized deductions might include:

  • Costs of long-term care insurance
  • Certain interest expenses, such as mortgage interest
  • State and local sales taxes
  • State and local personal income taxes

4. Medical and Dental Expenses

If medical and dental expenses exceed a certain amount of your AGI, they may be deductible. For taxpayers who are 65 by the end of 2017, it is 7.5% of AGI. For younger taxpayers, it’s 10%.

Claiming this deduction takes some work--you first need to find your 2017 medical receipts and add them up. Then calculate your estimated AGI for 2017 and divide your eligible expenses by your AGI. This deduction isn’t likely available to you if you’ve had an occasional doctor’s visit, but if  you’re medical costs have been well above average for the year, it may be worth it to do the math.

The amount of your medical expenses that exceed the 7.5% or 10% amounts will be deductible.

5. Charitable Contributions

Charitable contributions are an easy one to take advantage of, and often correspond with the end-of-year giving season as well.

Charitable giving has tremendous value to the donor and receiver. For the donor, there are current tax savings through a deduction, a possible reduction in federal estate taxes, and they are free from gift taxation. For the receiving charity, they pay no taxes for the gift received, nor do they pay taxes for any income earned by the donated property, such as a stock or bond.

Eligible charities aren’t limited to religious institutions. Charities with scientific, literary, or educational purposes may also be eligible. Chances are good that if there’s a cause you’re passionate about, you can find a charity to provide a donation to--a tax-deductible donation.


I hope this article has helped you discover a few ways to lower your 2017 taxes. What’s great about many of these deductions--especially the Above the Line Deductions--is that they not only decrease your tax liability, but can help you financially in the future through saving, investing, and compound interest. The government wants you to be wealthy. Imagine that!

If you have questions about any of the topics discussed, please reach out to me.