Individual Deductions And Updates

Individual Deductions And Updates


The standard deduction for separate filers
is $12,200 and for joint filers it’s $24,400. Itemized deductions are more beneficial
if taxpayers bunched deductions into one year. The itemized deductions that may be
able to be shifted from year to year are real estate taxes, state income tax
estimates, charitable donations, and any large medical
procedures that can be planned. This bunching strategy needs to be
discussed with your tax advisor to be most beneficial. Some expenses are
limited or no longer available. Let’s discuss those expenses. State and
local tax deduction including sales, tax, property tax and state
income tax is limited to $10,000. Home office expenses and un-reimbursed
business expenses are no longer deductible if you are a W2 employee. Personal casualty and theft losses are
only allowed if it arises due to an event officially declared a federal
disaster area. Finally, work-related moving expenses are not
deductible except for members of the armed forces. Health savings accounts also known as
HSAs are available to participants in qualified high deductible health plans. You can contribute pretax income up to
$3,500 for self only coverage or $7,000 for family coverage into an
employer sponsored HSA account. HSA is can bear interest or be invested
growing tax deferred, similar to an IRA. Withdrawals for qualified medical expenses
are tax free and you can carry over a balance from year to year,
allowing the account to grow. Flexible spending accounts. Also known as FSAs can be funded with
$2,700 pretax income and an employer sponsored account, but have limitations on what can be
rolled over to the following year based on the employer plan. The plan pays or reimburses you
for qualified medical expenses. What you don’t use by the calendar
year’s end you generally lose.

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