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5 Itemized Deductions To Still Consider

3/11/2019

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Beginning in 2018 and lasting though 2025, new tax laws modified or eliminated itemized deductions, while increasing the standard deduction. Here are five valuable deductions still available (albeit altered) to keep in mind as you file your 2018 taxes and plan for your 2019 tax savings:

  • Medical expenses: The medical deduction threshold is reduced from 10 percent of adjusted gross income (AGI) to 7.5 percent, but only through 2018. Beginning in 2019, it reverts to 10 percent of AGI. Therefore, your 2018 return may be your last shot at a medical deduction.
 
  • SALT payments: Like before the big tax law changes, you can deduct state and local tax (SALT) payments for (a) property taxes and (b) income or sales taxes. For 2018 through 2025, however, the annual SALT deduction can't exceed $10,000.
 
  • Charitable donations: Generally, the deduction for charitable donations is preserved, while the annual limit on monetary contributions rises from 50 percent of AGI to 60 percent. But other new law changes make tax breaks for charitable gift-giving more tricky. Accordingly, you might bunch charitable donations in 2019 (combine 2-3 years worth of donations into one year) if it suits your needs.
 
  • Interest expenses: The threshold for deducting mortgage interest on acquisition debt has been lowered from $1 million to $750,000 for loans after Dec. 15, 2017. But prior debts are grandfathered. Also, you can no longer deduct mortgage interest on home equity debt unless it was used to buy, build or substantially improve your home that secures the loan. Finally, investment interest expenses are still deductible up to net investment income.
 
  • Casualty losses: The deduction for casualty and theft losses is suspended for 2018 through 2025, except for losses in a federally declared disaster area. Therefore, catastrophe victims may salvage a 2018 deduction, subject to the usual 10 percent-of-AGI floor. For disaster-area losses in 2019, you can elect to claim the loss on your 2018 return.
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Notably, the new law also eliminates the deduction for miscellaneous expenses, in addition to the other changes. But on the positive side, itemized deductions are no longer reduced for high-income taxpayers.
 
"Tax Tips" are published to provide current tax information, tax-cutting suggestions, and tax reminders. If you would like more information on anything in "Tax Tips," or if you'd like to be on our mailing list to receive other tax information from time to time, please contact our office.
 
The tax information contained in this site is of a general nature and should not be acted upon in your specific situation without further details and/or professional assistance.
 
We are trusted CPA advisors servicing Burr Ridge, Hinsdale, Willowbrook, Darien, Naperville, and all Chicagoland area. 

Do you need assistance with your business and/or personal tax returns? Would you like to have a trusted source for your accounting, allowing you additional time to focus on increasing your business? Do you use QuickBooks, or plan to in the future, for your accounting? We include these in all our service packages, customized to fit your personal or business needs.   
 
We are currently accepting new clients. Your initial consultation is free, so you have nothing to lose and everything to gain. Our experienced staff is available to help you streamline your accounting, giving you more free time for yourself. Set up an appointment today by calling (630) 320-3720 or email us at info@monarchaccountinggroup.com. 
 
For more free resources, such as Tax Rates, Tax Organizers, and Record Retention Schedules, access our website www.monarchaccountinggroup.com.

Monarch Accounting Group, Inc
145 Tower Drive, Suite 4
Burr Ridge, IL 60527
Phone (630) 320-3720
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Monarch Accounting Group Inc
145 Tower Drive, Suite 4
Burr Ridge, IL 60527-7836
Email: Info@MonarchAccountingGroup.com


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  • Home
  • Solutions
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