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Deductions That You Can Still Claim

Deductions That You Can Still Claim

Here Are the Tax Deductions Still Available

In our article about the new tax code, we explained that the new standard deduction has changed and that itemizing deductions has been virtually eliminated with the new higher standard deductions.  There are still some deductions that can be claimed to reduce your adjusted gross income and lower your tax bill.

Traditional IRA

You can still deduct the amount you contribute to an IRA from your gross income.  The maximum contribution is $5,500 up to age 50 and $6,500 for those 50 and older.  Also, contributions can be made up to April 15, 2019, and be listed on your 2018 tax return

Health Savings Account

If you contribute to an HSA after tax you can deduct up to $6,900 for families and $3,450 for individuals.  If you are 55 or older you are allowed an extra $1000.

Self Employment Deductions

If you are self-employed you pay both portions of social security and Medicare (15.3% of your net income).  You can deduct half of what you pay as an adjustment o your income.  You can also deduct your contributions to a self-directed retirement plan.  The cost of your health insurance, Medicare premiums or Medicare Supplement unless the expense is subsidized by your spouse’s employer.

Alimony

Alimony can still be deducted as long as the payments are listed in the divorce agreement and you have your ex-spouse’s social security number.  The new tax code limits this deduction for alimony agreements signed after 12/31/2018.

Child support is not deductible.

Employee Expenses

The new tax code has eliminated almost all employee deductions that were taken on schedule A.  However, some occupations can still deduct some of their expenses.

  • Teachers – The Educator Expense Deduction allows $250 per year for supplies if you teach K – 12 and work at least 900 hours per year.  This deduction is available to educators, aides, counselors, and principals.
  • Army Reserve – if you travel to drills more than 100 miles from home and stay overnight.  You can deduct hotel expenses, meals (there is a per diem limit set by the IRS) plus an allowance for driving your own car (54.5 cents a mile plus any fees for parking or tolls.
  • Performing Artist – if your income is less than $16,000 per year.  The IRS requires that you prove an income of $200 from at least two separate employers.
  • Disabled – if you are disabled, have a job and pay for assistive devices or other assistance allowing you to work, the expense is deductible.
  • Fee-Based Public Official – you can deduct your job-related expenses.  This deduction is for the fee per service officials such as a Notary.
  • Early Withdrawl Penalties – bank penalties related to early withdraw of certificates of deposit can be deducted.  You must have form 1099-INT or Form 1099.  There is no minimum or maximum set for this deduction.
  • Moving Expenses – for armed forces with a permanent change in station only.  This deduction requires Form 3903.

Remember that we are here to assist you with any back tax issues.  We work in all 50 states.  Work directly with an Enrolled Agent with more than 29 years in business and the experience that counts.  Tax Professionals with an A+ Rated Service that has never had a single complaint in 29 years.  Consultations are free and could save you thousands.

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