Fifty Shades of Tax Deductions

No Fifty Shades of Grey here.  Here are Fifty Black and White Tax Deductions and Credits.

1) Standard Deduction – Taxpayers can take the higher of the Standard Deduction or their Itemized Deductions.

2) Medical Expenses

3) Medical Miles – The deduction for medical miles is currently 23 cents per mile.

4) State Income Taxes

5) Sales Taxes – Can take the higher of sales tax or state income tax.

6) Real Estate Taxes

7) Personal Property Tax

8) Mortgage Interest – The interest deduction is limited is $1 million of debt plus a home equity line of $100,000.

9) Points Paid on Purchase of Primary Residence

10) Investment Interest – Limited to Investment Income.

11) Cash Donations – Limited to 50% of Adjusted Gross Income.

12) Property Donations – An additional form is required for property donations over $500.  Appraisals may be required for property donations over $5,000.

13) Appreciated Property Donations – Limited to 30% of Adjusted Gross Income.

14) Charity Miles – The deduction for charity miles is currently 14 cents per mile.

15) Unreimbursed Employee Business Expenses

16) Home Office Expense

17) Tax Preparation Fee

18) Expenses for the Protection of Income

19) Investment Expenses

20) Safe Deposit Box

21) Union Dues

22) Job Search Expenses

23) Gambling Losses – Limited to Gambling Winnings.

24) Casualty Losses

25) Excess Deductions on Termination of an Estate

26) Tax-Exempt Interest

27) Excludable Interest on EE and I-Bonds – Limited to bonds issued after 1989 used for higher education.

28) IRA – Annual contribution of $5,000 an additional $1,000 for taxpayers over age 50.

29) Roth IRA – Same limitations as an IRA. No income tax deduction. If the account is open for 5 years and over age 59 1/2, all distributions are income-tax free.

30) 401(k) Plan Contribution – Employees can contribute up to $17,000 per year.  An additional $5,500 is allowed for taxpayers over age 50.

31) Stock Losses – Capital gains and losses are netted.  If the net is a loss, a capital loss deduction of up to $3,000 is allowed.  Losses above this amount are carried forward to future years.

32) Rental Real Estate Losses

33) Farming Losses

34) Trade or Business Losses

35) Alimony Paid – Alimony is fully deductible by the payor and fully taxable to the recipient.

36) Tuition and Fees Deduction

37) Student Loan Interest

38) Health Savings Account Deduction

39) Moving Expense

40) Self-Employed Health Insurance

41) One Half of the Self Employment Tax

42) Penalty on Early Withdrawal of Savings

43) Domestic Deduction Activities Deduction

44) Annual Gift Tax Exclusion – Exclusion is $13,000 per recipient per year to an unlimited number of people.

45) Additional Gift Tax Exclusion – Payments made directly for higher education tuition and medical expenses are allowed above the annual $13,000 exclusion.

46) 529 Plan 5 Years Gifting Upfront – A 529 Plan allows for funding of 5 years in one year.  You just need to file the gift tax return to make the election.

47) Foreign Tax Credit

48) Education Credits

49) Child Care Credit

50) Retirement Savings Contribution Credit

What do you think?  Please leave your comments below.

Thomas F. Scanlon, CPA, CFP®

Tom Scanlon has over thirty years experience in public accounting with an extensive background in the areas of financial, tax, and estate planning. He prides himself on providing in-depth and customized solutions to privately held businesses and their owners. He is a Certified Public Accountant and Certified Financial Planner®. Tom is a frequent speaker for area organizations and has  recently been quoted on CNBC, Fox 61 News and AARP's blog. Tom also has been a guest columnist for numerous publications including The Wall Street Journal, Barron's, Money Magazine, The Hartford Courant, The Hartford Business Journal, and The New Haven Register. He is a member of the American Institute of Certified Public Accountants, the Connecticut Society of Certified Public Accountants, and the Financial Planning Association. Active in the community, Tom supports a variety of not-for-profit organizations.

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2 comments on “Fifty Shades of Tax Deductions
  1. Chris says:

    There are a lot of deductions. Some are hard to qualify.

    Owner Cel Financial Services
    IRS Registered Tax Return Preparer
    Registered bonded California CTEC Tax Preparer