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Itemized Deductions
Schedule A (Form 1040)
March 16, 2020

State and local tax deductions (SALT) are limited to $10,000 ($5,000 if married filing separately) per return, per year. This cap affects all state and local taxes, including real estate and income taxes.

Interest You Paid. This includes home mortgage interest and points, mortgage insurance premiums, and investment interest.

Your home mortgage interest deduction is subject to a number of limits. You can only deduct home mortgage interest to the extent that the loan proceeds from your home mortgage are used to buy, build, or substantially improve the home securing the loan ("qualifying debt”).

Your home mortgage interest deduction is limited to the following debt amounts: $750,000 (Single, Married Filing Jointly/Widower, Head of Household) and $375,000 (Married Filing Separately).


Recent legislation extended to 2019 (and retroactively to 2018) the deduction for mortgage insurance premiums, subject to certain limits. You can treat amounts you paid for qualified mortgage insurance during 2019 as home mortgage interest.

Investment interest is interest paid on money you borrowed that is allocable to property held for investment. It doesn't include any interest allocable to passive activities or to securities that generate tax-exempt income.

Gifts to Charity. You can deduct contributions or gifts you gave to organizations that are religious, charitable, educational, scientific, or literary in purpose. You can also deduct what you gave to organizations that work to prevent cruelty to children or animals.

Your cash donation to a public charity cannot exceed 60% of your AGI in order to be deductible on your income tax return. If you exceed the limit, you can carry forward the excess contributions for up to five years.

Certain cash contributions made for disaster relief efforts and victims of mass shootings may not be subject to the 60% limit for a determined period of time.

Casualty and Theft Losses. The TCJA suspended the deduction for all general casualty and theft losses between the 2018 and 2025 tax years.

However, you can still claim a casualty or theft loss resulting from a federally declared disaster. Your losses must exceed $100 and 10% of your AGI.

For net qualified disaster losses, the $100 limitation per casualty has been increased to $500 and the 10% of AGI limit doesn’t apply. A net disaster loss is defined as the excess of qualified disaster-related personal casualty losses over personal casualty gains. A qualified disaster-related personal casualty loss is a loss arising on or after the first day of the incident period to which the area relates, that is attributable to the qualified disaster.

If you have a net qualified disaster loss on Form 4684, Casualties and Thefts, and you aren’t itemizing your deductions, you can claim an increased standard deduction using Schedule A. You can find out how in the 2019 Instructions for Schedule A.


Other Itemized Deductions. Although the TCJA eliminated the entire category of miscellaneous deductions, you can still deduct as itemized deductions gambling losses up to gambling income, certain unrecovered investments in a pension, impairment-related work expenses (such as a sign-language translator), and casualty and theft losses from certain income-producing properties.

Remember, if you decide to itemize your deductions, make sure you keep all records required to substantiate your deductions.

Of course, help from a tax professional is always your best option in any dealings with the IRS. Keeping up with our newsletters is, of course, your preferred option in staying up-to-date with the most important news that may have an impact on your taxes and financial situation.
One of the taxpayers’ basic rights is to pay no more than the correct amount of tax they owe. Among the instruments meant to reduce the amount of money you owe in taxes are deductions, which lower your tax liability by lowering your taxable income. Everybody knows about standard and itemized deductions, even so, let’s take a quick look at what they mean for your income tax this year.

The standard deduction is the portion of income not subject to tax. The amount of standard deduction you qualify for depends on your filing status and is higher for blind taxpayers and those who are age 65 or older. The standard deduction generally increases each year due to inflation. This provision of the tax code is meant to ensure that all taxpayers have at least some income that is not subject to federal income tax.

The itemized deductions consist of a set of expenses on eligible products, services, or contributions that can be subtracted from adjusted gross income (AGI) to reduce your tax bill. Such deductions permit taxpayers who qualify to potentially pay less in taxes than if they opted to take the standard deduction.

Technically, taxpayers can choose to take either the standard, or the itemized deduction, and the IRS recommends that you take the time to run the numbers to see which option gives you a bigger deduction.

Here are the standard deduction rates for tax years 2019 & 2020 depending on your filing status.

Filing Status
Standard Deduction
2019
2020

Single & Married Filing Separately
$12,200
$12,400

Married Filing Jointly & Qualifying Widow(er)
$24,400
$24,800

Head of Household
$18,350
$18,650

For 2019 and 2020 alike, the additional standard deduction amount for the aged or the blind is $1,300 for each married taxpayer. The additional standard deduction amount increases to $1,650 for unmarried taxpayers.

For 2020, the standard deduction amount for an individual who may be claimed as a dependent by another taxpayer cannot exceed the greater of $1,100 or the sum of $350 and the individual’s earned income (not to exceed the regular standard deduction amount).


In most cases, your federal income tax will be less if you take the larger of your itemized deductions or your standard deduction.

With this said, let us remind you that the Tax Cuts and Jobs Act (TCJA) of 2017 and subsequent tax legislation have brought many changes both to the standard and the itemized deductions. With a much higher standard deduction, more people find that they're better off not itemizing.

If you itemize, you can deduct a part of your medical and dental expenses, and amounts you paid for certain taxes, interest, contributions, and other expenses.

To figure your itemized deductions, you must use Schedule A, Itemized Deductions (Form 1040 or 1040-SR).

One of the changes to the itemized deductions under the TCJA is that there no longer is any limit on your total Schedule A claims based on your income for tax years 2018 through 2025.

Let’s take a quick look of the itemized deductions available at present.

Medical and Dental Expenses. You can deduct only the part of your medical and dental expenses that exceeds 7.5% of the amount of your adjusted gross income.

Common deductible medical expenses include: medical services fees (from doctors, dentists, surgeons, specialists and other medical practitioners); travel costs to receive medical care including an ambulance service, planes, trains and automobiles (either the actual costs or standard mileage rate for your own car); medical and hospital insurance premiums; hospital service fees (lab work, therapy, nursing services, surgery, x-rays, etc.).

Taxes You Paid. The IRS allows you to deduct taxes you paid, such as property taxes, state and local income or sales taxes, taxes paid to a foreign government, and others. This deduction was also limited by the new tax law.
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