Pittman & Company, LLP issued the following announcement on March 11.
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.
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.
Original source can be found here.