How Possible is it to Claim the Deduct Mortgage Interest?

In a new post, the American Tax Service, a tax blog dedicated to educating Americans about the US tax system has revealed all there is to know about the mortgage interest tax breaks. Recent changes to the US tax system by the Tax Cuts and Jobs Act (TCJA) has left so many Americans puzzled as to what they are entitled to or which credits and deductions are still available for them.

One popular deduction which is still very much available to taxpayers is the mortgage interest tax deduction. The post sheds light into this once popular mortgage tax deduction, what has changed about it, and if it is still worth claiming.

Starting from 2018, the TCJA has reduced the principal limit in which interest can be deducted from $1,000,000 to $750,000. For married taxpayers who are filing a separate return, the limit has been scaled down from $500,000 to $375,000. These new changes are to last till the 2025 tax year but the limits do not apply to loans from 2017 or before.

The tax blog did put to rest the belief by most Americans that they will not be able to deduct any home equity loan interest with the new tax reforms. As long as the loan is used to improve the home and not used for other personal expenses, taxpayers will be able to deduct the interest. The mortgage deductions will only apply to a taxpayer’s primary residence or second home and will not apply to an investment property. Furthermore, the loan value and the interest deducted can’t be worth more than the initial cost of the home.

Mortgage interest deduction still remains an itemized deduction. So in order to claim it, taxpayers will need to make sure that their standard deduction isn’t worth more than their itemized deductions. But with the TCJA doubling the standard deduction, it is no longer a tough choice to make. This leaves only 30% of American taxpayers itemizing their deductions. And this is expected to drop even further to 5% in the coming years.

To read the original post, please visit https://americantaxservice.org/is-it-possible-to-deduct-mortgage-interest/

Medical Expenses Tax Deduction

The cost of medical care in America might be sky high but a lot of Americans are eligible for an itemized deduction for medical expenses in 2019 if they meet certain qualifications. A new blog post on Efile Tax Advisor sheds light on what these qualifications are and how to easily claim the medical expenses tax deduction in the 2019, 2020 tax season. So, if you do not want to potentially miss out on thousands of dollars in deductions.

Taxpayers whose medical expenses exceed 7.5% of their calculated adjusted gross income in the 2017 and 2018 tax year are allowed to make deductions for any medical expenses. For instance, if a taxpayer has an adjusted gross income of $45,000 and a medical expense of $5,475, the adjusted gross income of $45,000 will be multiplied by 0.075. This equals $3,375. So, any medical expenses above this figure will be deductible. In this case, that would be $2,100 in medical expenses.

Taxpayers should also note that not every type of medical expense is deductible as the IRS will only give credence to qualified medical expenses.

Some of the medical expenses that can be deducted are:

  • Preventative care.
  • Medical treatment.
  • Dental and optical care.
  • Visits to psychiatrists and psychologists.
  • Prescriptions are also deductible, including hearing aids, glasses, and contact lenses.
  • Medical mileage deductions can also be made

Some of the medical expenses that cannot be deducted include:

  • Reimbursed medical expenses
  • Employer-sponsored healthcare programs
  • Cosmetic medical procedures
  • Non-prescription drugs including insulin
  • General health purchases, like vitamins and dietary foods

To claim the medical expenses deduction from the IRS, all deductions need to be itemized. Standard deductions do not apply and taxpayers, whose standard deductions are higher than the itemized deduction, will not be eligible for the medical expenses deduction.

To easily itemize these deductions, Efile Tax Advisor recommends using an online tax preparation to help work out the figures quickly and easily.

For more information on the Medical Expenses Tax Deduction 2019, 2020 and how to easily claim it using an online tax preparation software, please visit, https://efiletaxadvisor.com/2019/05/06/medical-expenses-tax-deduction/