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What Adjustments to 2017 Gross Income Are Available?

Once total or gross income from all sources has been determined, certain adjustments to income are available.  These adjustments amount to a reduction in gross income and generally are granted to achieve tax fairness or in recognition of a desirable social objective.  Adjustments to income are available regardless of whether a taxpayer itemizes deductions or takes the standard deduction.

The available adjustments to income include:

IRA Contributions

Eligible individuals can contribute and deduct up to $5,500 to an IRA; $11,000 for an eligible married couple, even if one spouse has no earned income.  For workers age 50 and older, the IRA contribution limit is $6,500 for 2017.

Education Savings Account Contributions

Subject to income limitations, up to $2,000 per beneficiary (generally a child under age 18) per year may be contributed to an Education Savings Account and deducted; subject to income limitations.

Student Loan Interest Deduction

Up to $2,500 of the interest paid in 2017 on a loan for qualified higher education expenses may be deducted, subject to income limitations.

Health Savings Account Deduction

Contributions to a Health Savings Account, up to specified maximums, may be deducted.

One-Half of Self-Employment Tax

Self-employed taxpayers generally deduct one-half of their self-employment tax, as determined on Schedule SE.

Self-Employed Health Insurance Deduction

Self-employed taxpayers can deduct 100 percent of the health insurance premiums (including long-term care insurance premiums) they pay for themselves, their spouses and dependents.