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2019 Itemized Tax Deductions

2019
Itemized
Deductions

You can deduct your expenses via standard deduction or itemized deductions. Not sure whether to itemize deductions or use the standard deduction? When you prepare and e-File your tax return on eFile.com, we will make this easy for you and you can be assured that the results are in your best interest based on the latest tax reform changes. If you have questions, you can always contact one of our Taxperts.

If you want to learn more about itemized deductions, read on for a list of expenses you can itemize on your 2019 Tax Return.

1. Medical Expenses

It might be beneficial for you to itemize your, your spouse's, and your dependents' medical and dental care expenses on Schedule A associated with Form 1040. When you prepare and e-File your taxes via the eFile.com app, we will give you this option and will compare it with your standardized deduction.

To find out how much you can deduct or itemize, add up your total medical and dental expenses for yourself, your spouse, and dependents for Tax Year 2019. You can only deduct the medical expense amount that exceeds 7.5% of your 2019 adjusted gross income (AGI).

For example:

Let's say your AGI is $40,000 and your medical expenses are $5,000. As a result, you could claim $2,000 on your tax return: $40,000 AGI * 7.5% = $3,000. Thus, $2,000 exceeds your $3,000 limit of your $5,000 medical expenses. 

Line 1: Your total 2019 medical/dental expenses (not reimbursed or paid by others) are: $5,000
Line 2: Your AGI in 2019 (see line 8b of 2019 Form 1040) is: $40,000
Line 3: 7.5% of your AGI is: $3,000
Subtract line 3 from line 1, and this is the amount you can deduct: $2,000
If line 3 is greater than line 1 you cannot deduct medical/dental expenses. In the example above, you can deduct $2,000 of your expenses.

2. Taxes You Paid

Deductions for state and local sales tax (SALT), income, and property taxes can be itemized on Schedule A. The total amount you are claiming for state and local sales, income, and property taxes cannot exceed $10,000.

Please keep in mind that state, local, sales, and foreign property taxes deducted on Schedule C, Schedule E or F do not have a limit. For example, if an individual owned and rented a property, their property taxes are not capped. 

For example:

If you paid $3,210 of Property taxes on your home residence, it would be to your advantage to deduct this amount if it is above your standard deduction.

3. Interest You Paid

Home mortgage interest is the interest you paid on debt taken out to buy, build, or improve your home. Just to be clear, you can only deduct the interest you paid on your mortgage debt, not on the debt amount. The interest amount is reported to you on Form 1098 provided for the year by your mortgage company.

A. For home mortgage debt taken out on or after December 15, 2017: 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).

B. For home mortgage debt taken out before December 15, 2017: Your home mortgage interest deduction is limited to the following debt amounts: $1,000,000 (Single, Married Filing Jointly/Widower, Head of Household) and $500,000 (Married Filing Separately).

As of this writing for Tax Year 2026, the mortgage interest cap goes back to home mortgage interest paid on all mortgages $1,000,000 or lower.

If you sell your home, you can still exclude up to $250,000 from capital gains taxation ($500,000 if Married Filing Jointly) if you owned and used the home as a primary residence for two of the past five years.

For example:

Home Mortgage Amount: $235,500
Annual Interest Rate: 4.1%
Annual Mortgage Interest Payment: $9,655.50

You can deduct the $9,655.50 mortgage interest you paid during the tax year.

One Important Change Regarding Home Equity Debt

Interest paid up to $100,000 in home equity debt taken to improve an existing home or to purchase a home is deductible on debts incurred on or before December 15, 2017. You could also use the debt to pay college tuition, credit card debt, or other non-home expenses. In effect, you could deduct interest on a $1.1 million mortgage/debt amount. 

For home equity debts incurred after December 15, 2017, you cannot deduct interest on the debt on 2018-2025 Tax Returns unless it is used to buy, build, or improve your home that secures the debt. Your interest deduction is limited to the $750,000 (Married Filing Jointly) and $375,000 (Married Filing Separately) debt amounts. Debts incurred on or before December 15, 2017 are grandfathered into the old amounts listed above. Unless new legislation changes this, it will revert to its prior state for Tax Year 2026 and you will again be able to deduct interest on $1 million mortgage and $100,000 on home equity debt, regardless of when the mortgage was taken out.

4. Charity Contributions

For Tax Year 2019 Tax Returns, your cash donation to a public charity cannot exceed 60% of your AGI or adjusted gross income in order to be deductible on your income tax return. Appreciated assets including long-term appreciated stocks or property is generally deductible at fair market value not to exceed 30% of your adjusted gross income. For record keeping purposes please consider the following:

1. The public charity or private foundation is a non-profit, IRS registered 501(c)(3) organization.
2. Keep a record of the contribution (usually the tax receipt from the charity).
3. For non-cash donations, you might have to obtain a qualified appraisal to substantiate the value of the deduction you are claiming.

For example:

Cash Contribution to Private Charity: $1,110. If your AGI is $30,000, 30% of your AGI is $9,000 so you can deduct the $1,110 of the charitable contribution.

5. Casualty and Theft Losses

The itemized deduction for personal casualty and theft losses has been removed for Tax Years 2018 through 2025 with the exception of losses attributable to a federal disaster as declared by the President.

6. Job Expenses and Miscellaneous Deductions

For Tax Years 2018-2025, job expenses and miscellaneous deductions limited to 2% of your Adjusted Gross Income or AGI are eliminated. These include expenses incurred on the job and are not reimbursed (e.g. tools, supplies, uniforms, dues and subscriptions, job search expenses, unreimbursed travel mileage, home office deductions. In summary, deductions for unreimbursed employee expenses and tax preparation expenses cannot be included on 2018-2025 Tax Returns.

7. Total Itemized Deduction Limits

There is no limit on itemized deductions for Tax Years 2018 through 2025.

8. Itemized or Standard Deduction?

Below a summary of the sample amounts listed above in comparison to the 2019 Tax Return standardized deductions.

For example:

1. Medical Expenses: $1,000
2. Taxes you paid, property taxes: $3,210
3. Mortgage Interest Payment: $9,655.50
4. Charity Contributions: $1,110
Total itemized deductions: $14,975.50

In comparison to the 2019 Tax Year standardized deductions:

Filing Status
Deduction
Single
$12,200
Head of Household
$18,350
Married Filing Separately
$12,200
Married Filing Jointly
$24,400
Qualfiying Widow(er)
$24,400

 

As you can see, with the filing status Single and Married Filing Separately, you would be well advised to itemize your deductions. All other filing statuses would do better with the standardized deduction.

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