Description
Prepare your 1040 correctly with knowledge of deductible expenses, when itemizing deductions are mandatory, and what qualifies for a correct standard deduction.Itemizing your deductions is more difficult now with the changes resulting from the Tax Cuts and Jobs Act of 2017. Many individuals fail to understand which expenses qualify for an itemized deduction and which do not. Additionally, failure to plan for the timing of those eligible deductions can be detrimental. With the confusion, many individuals are defaulting to the standard deduction instead of itemizing their deductions. The easy choice isn’t always the best choice.This topic reviews the changes to the law and explores the standard and itemized deductions available to individuals. This information is critical to help individuals identify those expenses and situations that can lead to the most advantageous deduction.
Current Standard Deductions
• Depends on Filing Status
• Additional Amount for Those 65 or Older and/or Blind
• Standard Deduction for Dependents
Itemized Deductions
• When to Itemize vs. Utilizing the Standard Deduction
• What’s New on Schedule A, Itemized Deductions
• Situations Requiring Itemized Deductions
Medical and Dental Expenses
• Limitation on Deduction
• What Qualifies as a Medical or Dental Expense?
• Whose Medical and Dental Expense Is Included?
Taxes You Paid
• Deductible vs. Nondeductible Taxes
• State and Local Tax Limitation
Interest You Paid
• Mortgage Interest Limits
• Mortgage Insurance Premiums and the Limitations
• Points
• Investment Interest
Gifts to Charity
• Qualifying Organizations
• Substantiation Requirements
• Limitations
Other Itemized Deductions to Consider
• Casualty and Theft Losses
• Other
Deductions No Longer Available
• Unreimbursed Employee Expenses and the Exceptions
• Miscellaneous Deductions Subject to the 2% AGI Limit
John T. Alfonsi, CPA/ABV/CFF, CFE, CVA, MST-Cendrowski Corporate Advisors
