It’s January of the New Year and other than starting fresh and enduring frigid temperatures, tax season has arrived. Below are some of the 2018 tax deduction changes you should know when filing in 2019.1
- 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.
- Home renovation deduction. If you made improvements to your home to satisfy medical conditions such as adding wheelchairs ramps or wall rails, you can deduct those renovations as medical expenses.
- Jury duty pay. If your employer continued to pay your full salary while you served on a jury, but required you to sign over your jury pay, you can deduct that amount from your taxable income.
- Volunteer work donations. You can deduct related expenses for charity work, like the cost of gas to get to and from the place, meals, uniform maintenance, etc.
- College tuition. You can deduct up to $4,000 in qualifying higher education tuition and fees you paid for yourself, your spouse or a dependent. However, if you are married and filing separately, you do not qualify for this deduction.
- Educational expenses. The American Opportunity Tax Credit has now been made permanent. This means you can deduct up to $2,500 per student for four years of post-secondary education.
- Health savings account contributions. You can claim a tax deduction on contributions you or someone other than your employer made to your account.
- Cash donations. You can deduct cash donations to IRS-approved charities for up to 50% of your adjusted gross income. Remember, you must have written records to support your claims.
- Non-cash donations. You can claim the fair market value on items you donated such as clothing and household items for the price for which you could have sold the items for.
- Senior tax deduction. If you and your spouse were 65 or older by the end of the 2018 tax year, you are eligible for a higher standard deduction.
These are only a few of many tax write-offs. To learn more, contact us. We know that taxes can be daunting, but don’t delay it. Remember, the earlier you begin, the higher chance you’ll have of taking advantage of all the tax breaks!
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[1] https://www.entrepreneur.com/article/324216