As many tax payers discovered from the last tax season, it was better to take the standard deduction and not itemize deductions. Will your expenses exceed standard deduction amounts for your 2019 taxes? As a taxpayer, you will have to take a good look at your expenses each year to see whether you itemize or take the standard deduction.
Here's information you need to consider when filing your 2019 taxes:
* Medical and dental expenses —If they are more than 7.5 percent of your adjusted gross income, you get a deduction.
* State and local taxes — You will not be able to deduct state and local income, sales and property taxes if your deductions exceed $10,000. It's $5,000 for married taxpayers filing separate returns.
* Miscellaneous deductions — These job-related expenses cannot exceed 2 percent of your adjusted gross income.
* Home equity loan interest — You won't be able to deduct interest that you paid on home equity loans except if you took out the loan to buy, build or substantially improve your main home or second home.
* Charitable contributions limit modified — The limit has increased from 50 percent to 60 percent of your adjusted gross income. You may be able to deduct more of your cash contributions.
* Casualty and theft losses deduction has been modified — Net amounts are deductible only to the extent that they're attributable to a federally declared disaster.
* The deduction for moving expenses is suspended — There are exceptions if you are a member of the U.S. Armed Forces on active duty and don't get reimbursed by the government for the expense, you can deduct it from your taxes.
* Repeal of deduction for alimony payments — These payments are no longer deductible. Note that alimony and separation maintenance payments are no longer included as income, so you won't need to report these payments on your tax return.
Many taxpayers will opt to not itemize deduction because the standard deduction is nearly doubled.
Good News - You may be able to deduct more of your total itemized deductions if they were limited in the past due to the amount of your adjusted gross income.
We recommend that you consult qualified professionals and/or IRS regulations as you approach the tax filing date...April 15!