With the 2019 filing season around the corner, here is a quick rundown of the changes in itemized deductions. First the two big ones, tax and interest deductibility:
• Total real estate and state and local income taxes or general sales taxes are limited to $10,000.
• Home mortgage interest is limited to $750,000 for homes purchased after December 14, 2017.
• A home equity loan, home equity line of credit or second mortgage interest is only deductible if used to buy, build or substantially improve the home.
• Personal casualty losses are only deductible if the loss was incurred in a federally declared disaster area
• While Itemized deductions are no longer limited for higher income taxpayers, Medical expense AGI threshold is 7.5% for 2018 for all taxpayers.
• Miscellaneous itemized deductions subject to the 2% AGI floor are no longer deductible including the popular employee business expenses that were reported on Form 2106.
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