Tax Deductions

What tax deductions are still available to me?

Tax reform measures are enacted frequently by Congress, which makes it hard for U.S. taxpayers to know which deductions are currently available to help lower their tax liability.

Taxpayers may be able to take deductions for student-loan interest, out-of-pocket charitable contributions, health savings account, home mortgage interest, contributions to a traditional IRA, and deductions for self-employed taxpayers (SE tax, SE health insurance, SE qualified retirement plan contributions). Of course, some tax deductions are limited or disappear as adjusted gross income increases.

Another key deduction is unreimbursed medical and dental expenses.  The adjusted gross income (AGI) threshold for deducting unreimbursed medical expenses was retroactively reduced from 10% to 7.5% for tax years 2017 and 2018 only. In 2019, you may only deduct medical and dental expenses to the extent that they exceed 10% of your AGI and were not reimbursed by your insurance company or employer. 

Home mortgage interest has several modifications. The Tax Cuts and Jobs Act of 2017, enacted Dec. 22, suspends from 2018 until 2026 the deduction for interest paid on home equity loans and lines of credit, unless they are used to buy, build or substantially improve the taxpayer’s home that secures the loan.

Interest on a new home mortgage is limited to interest paid on a maxi