If you’ve been following us for a bit, you may have noticed that we’ve highlighted the most well-known deductions that can be itemized for your tax return: medical expenses, the SALT deduction, home mortgage deduction, charitable deduction, and casualty losses. There’s one more section left on that Schedule A form, “Other itemized deductions.”
Other Itemized Deductions
What constitutes other itemized deductions? Before the Tax Cuts & Jobs Act (TCJA) of 2017, a long list of deductible expenses, mostly associated with business-related expenses, were allowable. The TCJA overhaul reshaped deductible expenses as we know it. Therefore, the list of allowable “other itemized deductions” shrank down to a significantly smaller list:
- Gambling losses up to the extent of gambling winnings
- Casualty & theft losses from income producing property
- Federal estate tax on income in respect to a decedent
- Deduction for amortizable bond premium
- Ordinary loss attributable to a contingent payment debt instrument
- Deduction for repayment of amounts under a claim of right if over $3,000 (see pub 525)
- Certain unrecovered investment in a pension
- Impairment-related work expenses of a disabled person
If you’re curious, check out Publication 529 starting on page 3 for an exhaustive list of what is no longer deductible.
Schedule A Deduction Plan
Combining these other itemized deductions with the other Schedule A deductions will help you to claim itemized deductions as opposed to only claiming a standard deduction. Itemized deductions lower your taxable income and can potentially save you in taxes if you itemize properly. With some planning, taxpayers can rightfully claim itemized deductions. Here at MiklosCPA, we feel that sharing knowledge, such as available itemized deductions, empowers our clients to make effective decisions for their emerging businesses. Get a vision of how we can help your emerging business by giving us a call! Also, follow our social media pages for more “good-to-know” articles like this one and share that knowledge with your friends and associates!