In case you haven’t already heard, a new tax law was passed at the end of last year that radically changed the landscape of how we file taxes, and what sorts of things can be deducted. This new tax law, for better or worse, simplifies the tax process by reducing the number of deductions for many taxpayers.
However, there are still plenty of deductions that can be taken advantage of, and may get you a better return than the standard deduction. This is entirely dependent on the specific situation of each taxpayer, though. Here are some of the tax deductions that are still available and are likely to be commonly used…
Under the new tax law, many taxpayers will actually be able deduct more medical expenses than they previously would have been able to. Medical expenses that aren’t reimbursed that exceed 7.5% of their adjusted gross income may be used for deductions. In the past, the number was only AGI that exceeded 10%. This change is also retroactive back to January 1st, 2017.
Most taxpayers who itemize their deductions utilize the charitable contributions deduction. This isn’t going to change with the new tax law, as 60% of adjusted gross income spent used towards applicable charitable causes can be deducted now, which is up from the previous limit of 50%.
SALT Deductions Still Exist
One of the most common misconceptions about the new tax law is that the state and local tax deductions (or SALT deductions) no longer exist. However, you can still deduct these taxes, but the amount that you can deduct has been severely capped. As of 2018, SALT deductions may not exceed $10,000, which is considerably reduced. However, when paired with other deductions, it may still add up to higher than the standard deduction.