No one wants to pay more in taxes than they have to. Fortunately, numerous deductions and credits can help lower your final tax bill.
However, don’t make the mistake of trying to claim one of the following expenses. Why? Some of these deductions were wiped out by the Tax Cuts and Jobs Act of 2017. Others were never real deductions in the first place, or are not deductible unless you closely follow certain rules.
Claiming the following “deductions” could come back to haunt you if you are audited.
1. Unreimbursed work expenses
Before the Tax Cuts and Jobs Act of 2017, people who itemized their tax deductions could deduct a whole slew of miscellaneous expenses to the extent that those exceeded 2% of their adjusted gross income. This included unreimbursed work expenses.
The 2017 tax law suspended this deduction, however, as we reported in “7 Tax Breaks You Can Kiss Goodbye in 2019.” So, the typical worker currently cannot deduct the cost of uniforms, union dues or business-related meals or entertainment. (Self-employed workers who file a Schedule C with their tax return have more leeway.)
2. Moving expenses
Moving expenses are not deductible at this time. This deduction, too, was suspended by the 2017 tax law.
The only exception is for active-duty military members who relocate because of a new assignment.
3. The kitchen counter that doubles as a work desk
If you’re self-employed or own a business, you may be able to claim a home office deduction. However, you can turn this legitimate deduction into something phony by stretching the rules.
Money Talks News founder Stacy Johnson writes in “Do You Qualify for a Home Office Deduction?“:
“Simply doing some work at the dining room table isn’t enough to qualify. You must use part of your home as your principal place of business, and use it exclusively for that purpose.”
So, your “home office” cannot include the kitchen counter where you set up your laptop in the morning and chop vegetables in the evening. It also can’t be the desk that you use for work and the kids use for homework.
4. Losses from a house fire
The Tax Cuts and Jobs Act restricted the deduction for net casualty and theft losses. Now, taxpayers may deduct these losses only if they are attributed to a federally declared disaster.
5. Home insurance
The federal government kindly allows deductions for some costs of homeownership, as we detail in “8 Federal Income Tax Breaks for Homeowners.”
But by no means are all homeownership costs deductible.
Homeowners insurance, for example, is not deductible except as a business expense if you own a rental property.
6. Interest on a home equity loan
Using a home equity loan to pay off higher-interest debt such as credit card debt can be a smart money move in some situations. But that doesn’t mean you can write off the interest payments.
The rules for deducting interest on a home equity loan have changed. According to the IRS:
“Interest paid on most home equity loans is not deductible unless the loan proceeds were used to buy, build, or substantially improve your main home or second home.”
7. State and local taxes over $10,000
The ability to deduct state and local taxes on federal tax returns has historically been a major benefit for taxpayers in many states. But the Tax Cuts and Jobs Act of 2017 chopped that deduction off at the knees.
You now can deduct only $10,000 of taxes paid to state and local governments — or $5,000 if your tax-filing status is married filing separately, the IRS says.
That may seem like a lot if you live in a low-tax region, but it’s a significant loss for taxpayers in states like California and New York, where property taxes can be high.
8. Cosmetic surgery
Cosmetic surgery may be a medical cost, but you can’t deduct it on your federal income tax return.
There is an exception, however, if the surgery “was necessary to improve a deformity related to a congenital abnormality, an injury from an accident or trauma, or a disfiguring disease,” according to the IRS.
9. A doctor-ordered vacation
Even if your physician says a week in the Bahamas would be good for your health, you can’t deduct it on your tax return.
Lodging expenses are considered a deductible medical expense only if you were “away from home to receive medical care provided by a physician in a hospital or a medical care facility related to a hospital, provided there was no significant element of personal pleasure, recreation, or vacation in the travel,” the IRS says.
10. Political contributions
Writing off contributions to political candidates and organizations is a no-no. These groups are not tax-exempt charities, and so your contributions don’t qualify for a deduction.
To find out whether donations to any organization are deductible, use the IRS’ Tax Exempt Organization Search Tool.
11. Volunteer hours for charity
The IRS allows for the deduction of costs of operating a car for charitable purposes — to the tune of 14 cents per mile — for taxpayers who itemize their deductions. But the government doesn’t recognize donations of your time and talent as deductible.
12. Baby sitter for your date night
True, there is a child and dependent care credit. But not all child care expenses qualify.
You may claim the credit only for care that occurred in order for you to work or actively look for work — assuming that you meet the other requirements of the credit.
That means deducting the baby sitter for your date night is off-limits, even if that cost helps you remain sane enough to get back to work on Monday.
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