2018 Itemized Deduction Changes Implemented in 2019 Tax Filing Season

SALT Taxes – (State and Local Taxes)

The total SALT taxes will now be limited to $10,000 – this includes real estate (property) taxes, state and local taxes, and sales tax

Interest Deduction

Home mortgage interest has been limited to $750,000 if your house was purchased after 12/15/17.  Homes purchased before that date will still be limited to the previous $1,000,000. Your home mortgage interest is still deductible on the taxpayer’s main home or second home.  You may also deduct your HELOC (Home equity line of credit) or second mortgage if you used it to purchase, build, or improve your main home or second home.

Personal Casualty Losses

Personal casualty losses have been eliminated EXCEPT for casualty losses incurred in a federally declared disaster. You may also offset your personal casualty loss against your gains even if those losses were not in a federally declares disaster.

Personal Itemized Deductions

Personal itemized deductions are no longer deductible. You will no longer be able to deduct expenses such as union dues, unreimbursed job expenses, investment fees, tax prep fees, fees to fight the IRS, or hobby expenses.  Gambling losses will remain deductible up to the extent of your gambling wins. Investment interest will also remain deductible.

Medical Expense Deduction

Medical expense deduction is deductible.  You can deduct your qualified medical expenses that exceed 7.5% of your AGI (Adjusted Gross Income).  Beginning January 1, 2019 that 7,5% will increase to 10% of your AGI.

Itemized deductions

Itemized deductions are no longer limited for higher income taxpayers.

Charitable Contributions

The AGI limitation is now 60% of AGI. Payments made in exchange for college athletic seating rights are no longer deductible.

If you have questions, you can connect via phone or email an OC Tax Brake Agent to get your tax questions answered. A OC Tax Brake Agent can even review, sign, and file your tax return.