Itemized Deductions Changes

This video was published by the IRS.

Changes from the Tax Cuts & Jobs Act mean the standard deduction is worth almost twice what it was before. So you may get more benefit from the standard deduction than from itemizing. To figure out whether you should itemize, you can search “How Much is Standard Deduction” at IRS.gov, or speak with a tax professional.

If you choose to itemize your deductions, the law change also affects what expenses you can claim on Schedule A. You may deduct medical and dental expenses that exceed a certain percent of your adjusted gross income. The law now limits your total deduction for state and local, property, income, and sales tax to a combined total of $10,000 — $5,000 if married filing separately.

It also limits the amount of home mortgage interest and home equity interest you can deduct. Search Publication 936 at IRS.gov to learn more about these limits.

You may usually deduct gifts to qualified charities too, and you may deduct federal casualty losses, but only if they relate to a federally declared disaster. However, you may no longer take certain miscellaneous deductions as you have in the past, such as tax preparation and safe deposit box fees, uniform expenses, and union dues. Also, unreimbursed employee expenses such as business related meals, entertainment, and travel expenses are no longer deductible.

At any rate, add up all of these items to figure your total itemized deductions. Don’t itemize deductions unless your total is greater than your standard deduction, or unless you are required to itemize.

About cozbycpa

Heather L. Cozby is a CPA on the South Shore and Cape Cod. The managing partner of Cozby & Company, LLC, Heather has the resources and experience necessary to provide quality professional services on a timely basis and at a reasonable cost. She specializes in tax planning & preparation; audit, review & compilation services; management advisory services; bookkeeping; and accounting. Her unique niche is in working with homeowners’ associations and condominium trusts, advising with rental real estate, and providing outsourced financial consulting for mid-sized companies. She is more entrepreneurial than most accountants, and offers the best of both worlds - providing the services of a larger firm while retaining the ability to connect with her clients on a personal level.
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