This is NOT tax advice! please refer to your CPA/EA for a specific list that pertains to you; specially after the 2018 tax reform AND your income tax level/bracket may also phase-out some of these… however here is a list of common personal* tax deductions that people take:

  • Foreign Income Exclusions: due to tax treaty or bona fide residence in a foreign country
  • Carry-over Net Operating Losses: if you had NOLs in previous years and ELECTED not to carry it back, you may  be able to carry it forward to reduce this year’s taxable income
  • Capital Losses: if you have capital losses or previously suspended capital losses, you may deduct up to $3,000 in most cases
  • Health-Savings Accounts: if you contribute to an HSA account and use those funds for medical expenses, they may be deductible
  • Self-Employed Health Insurance: if your income comes from Schedule C (Self Employed or Sole Proprietors) or through entities such as Corporations or LLC/Partnerships; the health insurance premiums may be deductible
  • Student Loan Interest deduction: all or a portion of the interest paid related to a student loan may be deductible
  • IRA Deduction: if you contribute to a Traditional IRA, you may be able to deduct up to $6,500 (depending on age and income levels)
  • Tuition and Education Credits: from colleges and universities, in some cases vocational schools as well, may be deductible
  • Foreign Tax Credit: you may get a credit on foreign taxes paid on foreign earned income
  • Child and Dependent Care: you may get a tax credit for a portion of after school activities and adult dependent care expenses
  • Child tax Credit: You may be able to get a credit for each child you have as a depedent
  • Additional Child Tax Credits, Earned Income Credit, Net Premium Tax Credit:  mostly for low income households with you dependents.  This one is hard to explains, there are all sorts of circulating formulas around these credits
  • Standard Deduction: in 2018 the standard deductions were nearly doubled, so itemized deductions may not even be needed as the standard deduction may be higher than itemized
  • However if these happen to be higher than the standard deduction, these are the typical Itemized deductions for Schedule A:
    • Unreimbursed employee expenses: (personal car milage, office supplies, etc…) – Limited to amounts over 2% of your income
    • Medical Expenses: all medically necessary costs above 7.5% of your income may be itemized
    • Local Taxes: State Income Tax, Sales Tax, and Personal Property Taxes paid. Limited to $10,000 may be itemized
    • Home Mortgage Interest: (up to $750,000 debt) may be itemized
    • Gifts to Charity: all documented gifts to charity (up to a limitation of income) may be deductible by itemizing them

*NOTE: this is is NOT related to business expenses, for those read this article

-Hector Garcia, CPA

If you would like to hire my as your CPA, email me: hector@garciacpa.com or call my office to make an appointment: 954-414-1524

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