Category Archives: Deductions
So far this year, 33 states have been declared federal disaster areas, with some regions qualifying multiple times. Losses, particularly due to Hurricanes Milton and Helene, are expected to reach tens of billions of dollars. The situation is worsened by many victims lacking adequate or proper insurance to cover these damages. Some of these losses […]
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An attempt by Congress to end the medical expense deduction caused an intense reaction because it would have affected people in nursing homes and those with costly chronic diseases. In the end, the deduction was retained and made slightly more generous by lawmakers. They lowered the threshold from 10 percent to 7.5 percent of income […]
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The tax overhaul also suspended many other deductions or imposed new limits on them while targeting major write-offs such as mortgage interest and state and local taxes. These changes usually expire in late 2025. On Schedule A, a grab bag of items, Congress eliminated deductions for miscellaneous expenses. The change removed deductions for unreimbursed travel, […]
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As a result of the overhaul, the number of tax returns claiming deductions for charitable contributions is expected to fall by more than 50%. For 2018, approximately 15 million filers will take this write-off, compared to approximately 36 million for 2017. The standard 2018 deduction is almost double the 2017 level, rising from $6,350 to […]
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The overhaul made a significant change to the alimony payments tax status. For divorce and separation agreements signed after 2018, payers will not be able to deduct alimony on their tax returns. At the same time, future recipients will no longer be required to report these payments as income, making their tax treatment similar to […]
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The tax overhaul contains new restrictions, both indirect and direct, on mortgage interest deductions. By the end of 2025, these changes expire. According to IRS, the number of tax returns with a mortgage interest deduction will fall to approximately 14 million in 2018 compared to 32 million in 2017. One reason for the change is […]
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For many people, the most significant changes in the tax overhaul are the almost doubling of the standard deduction and the abrogation of the personal exemption. The standard deduction is the amount filers subtract from income if they do not break deductions for mortgage interest, charitable contributions, state and local taxes and other items in […]
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The tax overhaul placed a limit on deductions for state and local taxes, known as SALT, in a landmark change. These deductions were previously unlimited for individuals, although many people who owed the alternative minimum tax lost some or all of their SALT write-offs. Taxpayers can deduct property and income taxes or sales taxes for […]
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When filing your taxes, you will often have to choose between itemizing your deductions and taking a standard deduction. You should determine the amount of your deductions using both methods, then select which option reduces the amount of tax you owe. The method that leads to the greatest deduction typically provides the greatest credit. How […]
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In 2018, it’s $12,000 for single filers and separate married filers, $24,000 for jointly filing married filers and $18,000 for head of household. Even if you have no other qualifying deductions or tax credits, the IRS lets you take the standard deduction on a no-questions-asked basis. The standard deduction reduces the amount of income on […]
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