Medical Expenses (2019–2024)
- Threshold for deduction: 7.5% of AGI (for regular tax & AMT).
- Self-Employed Health Insurance: 100% deductible since 2003.
- Deductible medical expenses: Paid for self, spouse, and dependents.
- Timing: Deductible when paid (including payments via credit card).
Taxes (2018–2025)
Limits & Deductions
- State & local taxes (income, property, sales tax) capped at $10,000 ($5,000 MFS).
- Real estate taxes: Deductible in the year paid (allocated between buyers/sellers).
- Equitable ownership exception: Allows deduction for real estate taxes paid, even if not the legal titleholder.
- Foreign real estate taxes: No longer deductible under new law.
Non-Deductible Taxes
- Custom/import duties, Estate & Gift Taxes, Fines & penalties, Social Security/Medicare taxes.
Interest Deduction Rules
Non-Deductible Interest
- Personal loan interest (credit cards, car loans, overdraft fees).
- Home equity loan interest (unless used to buy/build/improve a home).
Mortgage Interest (2024)
- Deduction limited to $750,000 acquisition indebtedness ($375,000 MFS).
- Exception: If a home purchase was contracted before 12/15/17 and closed before 4/1/18, the $1 million limit applies.
Casualty & Theft Losses
- Deductible only for federally declared disaster areas.
Charitable Contributions
- Up to 100% of AGI, based on type of donation & recipient.
- Mileage deduction: 14 cents per mile for charitable service travel.
- Volunteer expenses: Scout leader uniforms, church conventions, etc.
Non-Deductible Charitable Contributions
- Civic leagues, unions, HOA dues, lobbying groups.
- Political contributions.
- Tuition, raffle tickets, blood donations, and time/services rendered.
Miscellaneous Deductions
Repealed Deductions (2018–2024)
- Investment expenses, employee business expenses, IRA custodial fees, job-hunting costs, professional dues, tax preparation fees.
Fully Deductible
- Casualty & theft losses (from income-producing property).
- Gambling losses (up to winnings).
- Special job-related expenses (for handicapped individuals).
Non-Deductible Personal Expenses
- Club dues, commuting costs, funeral expenses, political contributions, homeowners’ association fees, home repairs.
Bottom Line
Understanding which tax deductions apply—and which don’t—is essential for maximizing your savings. Keeping accurate records and staying aware of recent tax law changes can ensure you file correctly and optimize deductions.