Tax Reform Tax Tip 2019-28: Tax reform brought significant changes to itemized deductions

 

IRS Tax Tips March 21, 2019

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Issue Number:    Tax Reform Tax Tip 2019-28 Tax reform brought significant changes to itemized deductions Tax law changes in the Tax Cuts and Jobs Act affect almost everyone who itemized deductions on tax returns they filed in previous years..  One of these changes is that TCJA nearly doubled the standard deduction for most taxpayers. This means that many individuals may find it more beneficial to take the standard deduction. However, taxpayers may still consider itemizing if their total deductions exceed the standard deduction amounts. Here are some highlights taxpayers need to know if they plan to itemize deductions: Medical and dental expenses Taxpayers can deduct the part of their medical and dental expenses that's more than 7.5 percent of their adjusted gross income. State and local taxes The law limits the deduction of state and local income, sales, and property taxes to a combined, total deduction of $10,000. The amount is $5,000 for married taxpayers filing separate returns. Taxpayers cannot deduct any state and local taxes paid above this amount. Miscellaneous deductions The new law suspends the deduction for job-related expenses or other miscellaneous itemized deductions that exceed 2 percent of adjusted gross income. This includes unreimbursed employee expenses such as uniforms, union dues and the deduction for business-related meals, entertainment and travel. Home equity loan interest Taxpayers can no longer deduct interest paid on most home equity loans unless they used the loan proceeds to buy, build or substantially improve their main home or second home. More information: • Publication 5307, Tax Reform: Basics for Individuals and Families • Publication 501, Standard Deduction, and Filing Information • Schedule A, Itemized Deductions • IRS Tax Map IRS YouTube Videos: • Interactive Tax Assistant – English | ASL Share this tip on social media -- #IRSTaxTip: Tax reform brought significant changes to itemized deductions. https://go.usa.gov/xEHnK. Back to Top         Thank you for subscribing to IRS Tax Tips, an IRS e-mail service. For more information on federal taxes please visit IRS.gov. This message was distributed automatically from the IRS Tax Tips mailing list. Please Do Not Reply To This Message.

 

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