The 2018 Tax Reform brought about a number of changes to itemized deductions:
- Deduction for state
and local taxes - You can’t deduct more
than $10,000 ($5,000 if married filing
separate) of your total state and local
taxes, including income taxes (or general sales taxes, if elected instead of income taxes), real estate taxes, and personal property taxes.
- Mortgage interest and home equity loans – You may be able to
deduct mortgage interest only on the
first $750,000 ($375,000 if married filing separately) of indebtedness. Higher
limitations apply if you are deducting
mortgage interest from indebtedness incurred on or before December 15, 2017. In addition, there is no deduction for home equity loan interest. No matter when the indebtedness was incurred, you can no longer deduct the interest from a loan secured by
your home to the extent the loan proceeds weren't used to buy, build, or improve your home.
- Donations – the total
amount of such contributions that can be
deducted is now limited to 60% of your
contributions base, instead of 50%.
- Miscellaneous deductions subject to the 2% limit – These deductions have been suspended
- Personal casualty and theft losses – These have been suspended (with exceptions)
If your deductions include any of the above, the deductible amount could be less than what the total deductions add up to.
