The Tax Cuts and Jobs Act (TCJA) limited itemized deductions and doubled the standard deduction to entice more taxpayers to skip itemizing – but money-saving deductions still remain for eligible taxpayers. Do you qualify for any of the following nineteen deductions?
1. Charitable Donations – This is one of the few deductions with increased limits due to the TCJA. Charitable contributions are now limited to 60% of adjusted gross income (AGI).
2. Mortgage Interest – You can still deduct the interest on $750,000 worth of mortgage debt ($375,000 if married filing separately) for loans taken out after December 15, 2017. Deductions on older mortgages are capped at $1 million of debt. However, mortgage insurance is no longer deductible.
3. Home Equity Loan Interest – Home equity loan interest is now only deductible for funds used for home building or improvements that meet specific criteria. Total mortgage debt, including any home equity loan, must still fall below the $750,000 criteria listed above.
4. Medical/Dental Expenses – The amount of qualifying medical and dental expenses that may be deducted is limited to that which exceeds 10% of your AGI.
5. Property Taxes – State and local property taxes, including income taxes, sales taxes, and property taxes, are still deductible – but they’ve been limited (see below).
6. State and Local Taxes – State and local income and sales tax deductions, along with property taxes, have been limited to a collective $10,000 by the TCJA ($5,000 if you are married and filing separately).
7. Retirement Plan Contributions – Retirement plan contributions to tax-deferred accounts such as IRAs may be deductible. Roth IRAs are not deductible since they’re funded with post-tax dollars.
8. Self-Employment Taxes – You can deduct 50% of your self-employment taxes (effectively, the amount you pay as employer instead of an employee).
9. Health Savings Account (HSA) Contributions – Contributions to an HSA are tax-deductible up to $3,500 for individuals (employer plus employee) and $7,000 for families.
10. Home Office Deduction – You can deduct certain home office expenses – but only if you’re self-employed. Employees who work from home aren’t eligible.
11. Unreimbursed Employee Expenses – If you are a reservist in the Armed Forces, a fee-based local or state government official, or a qualified performing artist, you can deduct unreimbursed employee expenses paid or incurred during 2019 that are necessary and ordinary for continuing your trade or business. See Publication 463 for more information.
12. Expenses for Educators – Eligible teachers can deduct up to $250 spent out-of-pocket on classroom supplies and professional development courses.
13. Gambling Losses – Bad day at the casino? You can deduct gambling losses, but only up to the amount of your winnings.
14. Student Loan Interest Deduction – Students may deduct up to $2,500 in student loan interest, although phaseouts begin at $70,000 modified AGI for single taxpayers and $140,000 for married filing jointly.
15. Income from Pass-Through Businesses – The TCJA created a 20% deduction for pass-through business income from certain qualified businesses. Prior to TCJA, pass-through income was taxed at the standard rate.
16. Dividends and Partner Income – Taxpayers may also deduct 20% of qualified real estate investment trust (REIT) dividends and qualified income from publicly traded partnerships.
17. Moving Expenses – They’re still deductible for certain active-duty members of the military – but for the rest of us, the moving expense deduction has moved on until 2026.
18. Casualty and Theft Losses – As long as casualty and theft losses are due to a federally declared disaster, they’re considered tax-deductible.
19. Estate Tax – The TCJA doubled the limit for the top estate tax rate of 40% to estates of $11.4 million or greater ($22.8 million for couples).
20. No Deduction Limits – The TCJA eliminated income limits where overall deductions phase out. Limits will return in 2026 unless Congress takes action.
Don’t assume that the standard deduction works for you. Check all available deductions to see if itemizing pays off.
Failing to pay your taxes or a penalty you owe could negatively impact your credit score. You can check your credit score and read your credit report for free within minutes by joining MoneyTips.
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