Itemized Deductions

MEDICAL AND DENTAL EXPENSES

Deductible expenses include:

  • Prescription medicines and drugs (including insulin)
  • Medical, dental, and nursing care, including amounts paid for unreimbersed qualified long-term care services
  • Medical and hospital insurance premiums, including amounts paid for eligible long-term care (subject to certain limitations based on the insured person’s age)
  • Prescription eyeglasses, hearing aids, crutches, wheelchairs, and guide dogs
  • Certain home improvements made for medical purposes or to make the home suitable for a disabled person

Nondeductible expenses include:

  • Life insurance policy premiums
  • Nursing care for a healthy baby
  • Nonprescription drugs of medicines
  • Weight-loss programs (unless recommended by doctor)
  • Funeral, burial, or cremation costs
  • Unecessary cosmetic surgery (surgery that does not correct congenital abnormality or an abnormality caused by injury or disease)

Back to Top

TAXES

Deductible Taxes:

  • State, Local and Foreign Income Taxes – hose taxes include tax withheld, estimated payments and tax paid for an earlier year
  • Real Estate Taxes – State, Local or Foreign taxes on real property, such as the taxpayer’s house or land, are deductible.  Real estate taxes are deductible when paid.  If taxes are paid with a mortgage payment and held in escrow, do not deduct the taxes until they are paid back by the bank or the mortgage lender.
  • Personal Property – Tax-Taxes that state and local governments charge on the value of personal property is deductible.  A portion of the cost of perosnal vehicle registration may fall in this category

Nondeductible Taxes:

  • Federal taxes – income tax, social security (FICA), Medicare, railroad retirement tax, and excise taxes or customs duties
  • Water and sewr taxes
  • State, local and federal taxes on gasoline, diesel, and other motor fuels used in a non-business vehicle.
  • Utility taxes – gas, electricity, etc.

Back to Top

INTEREST

Home Mortgage Interest

A taxpayer can fully deduct points in the year he or she pays them only if all of the following conditions apply:

  • The taxpayer itemizes deductions
  • The loan is used to buy or improve a main home (a main home is the one the taxpayer lives in most of the time)
  • The loan is secured by that main home
  • The loan meets the requirements for deductible mortgage interest, discussed earlier under Home Mortgage Interest
  • Paying points is an established business practice in the area where the loan was made

Non-deductible Interest:

  • Loan fees; aid for services necessary to get a loan (closing cost, down paayment)

Back to Top

CONTRIBUTIONS

Qualifying Organizations:

  • Churches, synagogues, temples, mosques, Salvation Army, Red Cross, CARE, United Way, Boy & Girl Scouts, World Wildlife Fund, etc.
  • Nonprofit schools and hospitals

Nonqualifying Organizations:

  • Business organizations, such as the Chamber of Commerce
  • Politcal organizations and candidates
  • Homeowner’s associations

Deductible Items:

  • Money gifts
  • Dues, fees, and assessments paid to qualified organizations above the value of the benefits received (not country clubs or other social organizations)
  • Fair market value of used clothing, furniture, etc.

Nondeductible Items:

  • Cost of raffle, bingo, or lottery tickets
  • Blood donated to a blood bank or the Red Cross
  • Direct contributions to an individual

Back to Top

MISCELLANEOUS ITEMIZED DEDUCTIONS

Deductible Items:

  • Union dues and fees
  • Uniforms not adaptable to general use
  • Professional books, magazines, journals, etc.
  • Employment-related educational expenses
  • Expenses of looking for a new job
  • Investments counsel fees
  • Tax counsel and assistance
  • Safe deposit box rental for investment documents
  • Acupuncture
  • Insulin
  • Air conditioner for allergies
  • Nursing fees
  • Contacts, including supplies
  • Chiropractic services
  • Cosmsetic surgery for deformity relating to a congenital abnormality, accident, or disease
  • Birth control prescribed by a doctor
  • Investment interest
  • Casualty losses
  • Theft losses
  • Work clothes not suitable for normal wear
  • Occupational licensing fees
  • Travel expenses relating to managing investments
  • IRA administration fees
  • Fees to collect interest or dividends
  • Trust administration fees
  • Impairment related work expenses

Nondeductible Items:

  • Burial or funeral expenses
  • Wedding expenses
  • Home repairs, insurance and rent
  • Insurance premiums (except medical insurance premiums)
  • Losses from the sale of a taxpayer’s home, furniture, personal care, etc.
  • Personal legal expenses
  • Commuting expenses to and from work

Back to Top

IMPORTANT UPDATES

The first day to electronically file you tax returns stated by the IRS is January 27th, 2020 (you can still process your tax returns prior to that date).

If you are claiming the “Earned Income Credit” and the “Additional Child Tax Credit”, returns won’t be processed until February 15th, 2020 and most refund deposits won’t be available until February 27th, 2020 or beyond.

Most changes to the “New Tax Law Bill” will take effect starting January 1st, 2020 for the 2019 tax year!!!

Tax Law Changes for 2019(here)

Receive the latest news

Subscribe To Our Monthly Newsletter

Get notified about tax & business updates

PremierNews - Closer Than Ever

The premier company for tax & business advisory. View IMPORTANT UPDATES NOW.