There are a lot of things you can deduct when preparing your federal income taxes and that can include multiple business expenses and in some cases even child care costs, savings for retirement, and even gambling losses.
However, there are some things you can’t claim this year. The Internal Revenue Service (IRS) has eliminated many popular deductions including:
Some Mortgage Deductions
This is bad news for those with larger and more expensive houses. In years past, homeowners could deduct mortgage interest for homes up to $1 million, but beginning in 2017, the cap fell to $750,000. Likewise, the Trump tax code changes also removed the unlimited interest deduction for new and existing home equity loans. Also known as a “second mortgage,” the interest can now only be deducted if the money is used to “buy, build or substantially improve” your home.
In the past, divorced couples were allowed to set up alimony agreements that would allow the person making the payments to deduct that money from their respective federal taxes. If the divorce was completed after 2019, alimony payments can’t be claimed on the payer’s taxes and the receiver of those alimony payments does not have to add the payments to their taxable income.
Another blast from the past was the ability to deduct your moving expenses, but that has been eliminated for virtually all workers. Even as Covid-19 resulted in an exodus from large cities there is no longer a deduction for moving. Now only military members, who are required to move for a new assignment, can qualify for the deduction. The IRS clarified, “For tax years 2018-2025, reimbursements for certain moving expenses are no longer excluded from the gross income of non-military taxpayers.”
Disaster Loss Deduction
Despite some horrific disasters – from hurricanes to tornadoes to wildfires – there are now far fewer ways to deduct the losses from a natural disaster that wasn’t covered by your home insurance. As of 2018, only those living in a “presidentially designated disaster zone” were able to deduct uncovered losses when filing their taxes. Sadly that means if your house was destroyed in a fire and your insurance doesn’t cover all the costs, the losses can’t be written off from your federal taxes. Likewise, the IRS has noted that: “A casualty doesn’t include normal wear and tear or progressive deterioration.”
Some School Donations
Some of the costs of going back to school can be deducted, but not all school donations are deductible, however. Prior to 2018 for example, some colleges and universities required alumni to make a donation to purchase season tickets for football/basketball. Those donations used to be deductible, but aren’t anymore. After the sports seasons were cut short due to the pandemic, the donations required to purchase the tickets are no longer deductible. Fans will just have to pay more to enjoy the game in person.
Peter Suciu is a Michigan-based writer who has contributed to more than four dozen magazines, newspapers and websites. He regularly writes about military small arms, and is the author of several books on military headgear including A Gallery of Military Headdress, which is available on Amazon.com.