You’re probably already aware that you don’t have to pay federal income tax on all of your earnings. But exactly what are you allowed to deduct from your taxes to lower your total taxable income? Although certain tax deductions remain relatively stable from year to year, others change or disappear entirely, while new ones occasionally crop up. Here’s your chance to brush up on the most common tax deductions available for tax year 2019. If you have a complicated financial life or tax situation, you may want to consult with a certified public accountant to ensure you’re not overlooking additional valuable deductions.
Last updated: Jan. 13, 2020
What Is a Tax Deduction?
A tax deduction is an expense that you can subtract from your income for tax purposes. Tax deductions lower your total amount of taxable income and therefore the total amount of tax you have to pay. Generally, tax deductions are used to encourage certain activities on behalf of individual taxpayers, such as contributing to a retirement account, investing in a business or providing for a dependent.
Tax Deductions Available for the 2019 Tax Year
Here’s a look at the tax deductions you may be eligible to take for tax year 2019. While it doesn’t cover every single tax deduction that’s possible, the following list includes most of the major deductions available to you.
1. Medical and Dental Expenses
You can deduct medical and dental expenses for yourself, your spouse and your dependents. However, you can only deduct the amount of your total medical expenses that exceed 7.5% of your adjusted gross income.
2. Tax Preparation Fees (If You're Self-Employed)
Whether you do your own taxes with a tax calculator or pay someone else to do them, you can write off the fees on your miscellaneous tax deductions list — as long as you’re self-employed. Before the Tax Cuts and Jobs Act, anyone was eligible for this deduction, but now it’s only available to Schedule C and Schedule E filers.
3. Home Renovation for Medical Purposes
If you make improvements to your home for medical purposes — such as adding wheelchair ramps or lowering cabinets for better accessibility — you can deduct those renovations as medical expenses. If the renovations are made to increase the value of your home, however, you can’t claim them as medical-related expenses.
4. Local and State Sales Tax
Taxpayers have the option of deducting state and local general sales taxes or income taxes that they paid during the tax year, but not both. Under the recent tax law, the deductibility of state and local tax payments for federal income tax purposes is now limited to $10,000 — or $5,000 for married taxpayers filing separately — in a calendar year.
If you live in a state with no income tax, consider deducting state sales tax and local sales tax that you paid.
5. State, Local and Foreign Taxes
You can claim certain taxes as itemized deductions. Apart from state and local sales taxes, you can also deduct:
Local and state personal property taxes
Local and state real estate taxes
Foreign, local and state income taxes
6. Jury Duty Pay
If you gave jury pay to your employer because you were paid via salary while you served on a jury, you can deduct jury pay from your taxable income.
7. Volunteer Work Donations
You can deduct certain expenses for charity work, such as the cost of gas if you use your car to travel to and from the volunteer site. If you don’t want to calculate the value per mile, you can deduct a standard rate of 14 cents per mile. You can also deduct the cost of purchasing and maintaining uniforms that you wear to a volunteer site or the cost of parking in a garage if that’s required. Just make sure you get documentation from the charity.
8. Bad Debt
If you lent money that you never got back, it’s considered a bad debt. Generally, to deduct a bad debt, you must have previously included the amount in your income or loaned out cash. You must also show that you attempted to collect the debt and there’s no chance you’ll be able to recoup it.
9. Moving Expenses for Military Personnel
Previously, anyone who met the IRS distance and time tests after they relocated for a new job could take a moving expense deduction. This deduction was suspended under the changing tax law in 2017. However, the suspension does not apply to members of the military who move due to a permanent change of station.
10. Airline Baggage Fees (If You're Self-Employed)
If you’re self-employed or you travel for business, make sure to deduct your baggage fees. If you’re not self-employed, you won’t be able to take this deduction, so opt for an airline with low baggage fees.
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11. Mortgage Interest
You can deduct the interest you paid on loans of $750,000 or less. But if you’re married and filing separately, you can only deduct the interest on loans of up to $375,000.
12. Mortgage Points
If you itemize, you can deduct the points — or prepaid interest — that you paid to purchase or build your primary home. Typically, if you can deduct all the interest you paid on your mortgage, you can also deduct all of the points.
13. Home Sale
If you sold your home at a profit, you can exclude up to $250,000 of gains from your income. If you’re married and filing jointly, you can exclude $500,000.
14. Self-Employed Health Insurance
Health insurance is tax-deductible for self-employed taxpayers. If you were self-employed in 2019, you can deduct premiums that you paid for medical and dental insurance, as well as qualified long-term care insurance.
15. Investment Interest Expense
Prior to the change in the tax law, investors could deduct expenses such as investment advice, custodial fees for individual retirement accounts and accounting costs. However, these miscellaneous deductions were eliminated in 2018. You can, however, claim a deduction for your investment interest expense, which is the interest paid on money borrowed to purchase taxable investments. The amount that you can claim for the deduction is capped at your net taxable investment income for the year.
16. Gambling Losses
If you suffered gambling losses in 2019, you can deduct up to the amount of gambling income that you reported. You can claim your losses as an “other miscellaneous deduction,” but be prepared to show proof of those losses.
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If you paid alimony as part of a divorce or separate maintenance decree, you may still be able to deduct the amount that you paid. Your payments qualify as alimony if:
You and your spouse or former spouse do not file jointly.
Payments were made with cash, check or money order.
You are legally separated and don’t live in the same household as your former spouse.
Child support is not part of your payment.
Payments went to your spouse or former spouse.
However, alimony is no longer deductible for those who divorce after 2018, or for those who modify a pre-2019 divorce agreement.
18. Car Registration Fees
If you meet certain requirements, you might be able to include some or all of your vehicle registration fees in your tax deductions. If part of your registration is deductible, you must itemize your deductions.
19. Some Disaster Losses
You can only deduct disaster losses if the loss occurred in a federally declared disaster area.
20. Military Reservist Travel Expenses
If you travel more than 100 miles from your home as a military reservist, you can deduct travel expenses from the income that you report on your tax return.
21. Health Savings Account Contributions
Health savings accounts are tax-exempt accounts that you use to pay or reimburse certain medical expenses. You can claim a tax deduction on contributions that you or someone other than your employer made to your account.
22. IRA Contributions
Although IRS rules don’t allow deductions for Roth IRA contributions, you might be able to claim the amount that you put in a traditional IRA, as long as you — and your spouse, if you’re married — don’t have an employer-based retirement account.
For 2019, you can take a deduction up to the full amount of allowable contributions, which is $6,000 — or $7,000 if you’re age 50 or older. For 2020, those numbers will remain the same.
23. 401(k) Contributions
401(k) plans provide a special tax status for retirement savings and immediate tax benefits. When you contribute to your 401(k), you’ll effectively lower the amount of your taxable income, so there’s a smaller impact on your take-home pay. For 2019, contribution limits are $19,000, or $25,000 if you’re age 50 or older. In 2020, those ages 49 and younger will see a larger contribution limit of $19,500.
24. Dependent Care Flexible Spending Account
A dependent care flexible spending account lets you set aside pretax money for expenses related to caring for a child. This is not the same as the child tax credit, which you can use for a spouse, parent or other dependent with mental or physical disabilities. You’re allowed to contribute up to $5,000 tax-free toward an FSA every year.
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25. Membership Dues
You may be able to deduct membership fees or dues to a qualified organization, but only if the amount you contribute exceeds the value of the benefits you receive in return.
26. Work Uniforms (If You're Self-Employed)
Prior to the latest tax reform, anyone who was required to wear a uniform or specialized clothing as part of their job could deduct this expense. However, this deduction is now only available as a business expense to those who are self-employed.
27. Home for Business Use (If You're Self-Employed)
If you use part of your home for business, you might be able to deduct your home office as an expense. To qualify for this deduction, you must regularly use part of your home exclusively for conducting business and you must show that you use your home as your principal place of business.
28. Car for Business Use (If You're Self-Employed)
If you use your car for your job or business, you might be able to deduct the costs. You can either use a standard mileage rate or the actual-expense method, which is what it actually costs to operate the car for its business-use portion.
29. Business Travel Expenses (If You're Self-Employed)
You might be able to deduct business expenses that you incur while traveling for work. Costs could include transportation, meals, lodging and airfare. Any expenses that are considered extravagant or lavish don’t qualify for the business travel expenses deduction.
30. Educational Expenses
Under the American opportunity tax credit, you can deduct up to $2,500 per student for four years of postsecondary education. If this brings your net tax liability below zero, you can use up to 40% of the credit, or $1,000, as a refund.
31. Work-Related Meals and Gifts
After the tax reform in 2017, entertainment expenses for business purposes are no longer deductible. Meals remain deductible up to 50%, and the cost of gifts for business purposes can be deducted in total or in part, depending on the circumstances.
32. Earned Income Tax Credit
The earned income tax credit is a commonly overlooked tax credit for low- to moderate-income individuals. Although it’s not considered an IRS deduction, the EITC is a refundable tax credit meant to supplement income. For 2020, the maximum amounts range from $538 to $6,660.
33. Educator Expenses
K-12 educators can deduct up to $250 of unreimbursed expenses for books, supplies and computer equipment. To qualify, you must work at least 900 hours in a school year. Deductions can go up to $500 for married couples filing jointly if both parties are educators who incurred expenses.
34. Student Loan Interest
You can deduct some or all of any qualified student loan interest you paid during the tax year. You can deduct the lesser of $2,500 or the amount you actually paid. You can’t claim the deduction if you’re married and filing separately, or if you or your spouse are listed as dependents on someone else’s tax return.
35. Cash Donations
You can deduct cash donations to IRS-approved charities for up to 50% of your adjusted gross income. You must have written records of donations to deduct cash gifts in any amount — a copy of a bank record or statement from the organization will work. However, for certain private foundations and fraternal societies, you can deduct only up to 30% of your adjusted gross income.
36. Noncash Donations
If you choose to itemize your taxes, you can claim the fair market value — aka the price for which you could have sold the items — of clothing and household items you donated. If you plan to donate your car, make sure you donate to a qualified charity.
37. Senior Tax Deduction
Here’s some good money news for seniors: If you and your spouse were ages 65 and older by the end of the tax year, you’re eligible for a higher standard deduction.
38. Standard Tax Deduction
The standard deduction for 2019 is $24,000 for married couples filing jointly and for qualified widows and widowers. For single filers and married couples filing separately, the deduction is $12,000. If you file as head of household, you can deduct $18,000.
How To Claim Tax Deductions
You can claim a tax deduction when you file your income taxes every year. Different deductions appear on different forms, so you must either hire a tax professional, use tax software or follow IRS instructions yourself to determine exactly where to file them.
One of the most important considerations when filing your taxes is whether you should claim the standard deduction or if you should itemize your deductions. Here’s the distinction between the two:
Standard deduction: The standard deduction is a dollar-for-dollar reduction of your taxable income. Nearly all taxpayers are entitled to this deduction. For tax year 2019 (filing in 2020), the standard deduction is $24,400 for those with the tax status of married filing jointly. This will rise to $24,800 for tax year 2020 (filing in 2021). Single filers are entitled to a standard deduction of exactly half this amount. For tax year 2019, you can claim your standard deduction on Line 9 of your Form 1040.
Itemized deductions: Itemized deductions are expenses that qualify as deductions against your income. Most of the deductions listed in this article are itemized deductions. If your total itemized deductions exceed your allowable standard deduction, you’re usually better off claiming your itemized deduction and forgoing your standard deduction. You must claim your itemized deductions using Schedule A, which then transfers to Line 9 of your Form 1040.
What Can I Write Off on My Taxes?
Every individual has a unique tax situation, so there’s no one answer as to what tax write-offs you can take. However, everyone has some type of tax deduction that they’re eligible for, even if it’s just the standard deduction. The key is to keep accurate records of all of your expenses for the year so you can compare them with IRS regulations to determine if you qualify for certain deductions.
If your taxes are simple, you can calculate them yourself with some tax software. However, if your taxes are complicated, you may want to enlist the services of a CPA. This way you can ensure that you’re finding all of your allowable deductions and paying the lowest amount of tax that’s legally possible.
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