Tax Deductions: You can deduct what? 😮 – Napkin Finance

Tax Deductions
You can deduct what?

January 20, 2020
Tax Deductions

Standard Deduction vs. Itemized Deductions

One of the biggest decisions you’ll make when you file your 2019 taxes is whether to take the standard deduction or itemize your expenses.

The standard deduction is a flat number set by the IRS based on your income. If you don’t have a lot of deductible expenses, taking the standard deduction is the straightforward route.

That might seem like the way to go — after all, no one wants to spend more time on their taxes than they have to. But itemizing makes more sense if your allowed expenses add up to more than the standard deduction. Potential deductions include health insurance premiums, student loan interest, state and local taxes, mortgage interest, and charitable donations.

Learn more

You can deduct what? 

  • Swimming pools are iffy bets if you’re trying to up your home’s value. But you can deduct the cost of these so-called “money pits” if you can prove that swimming alleviates a medical condition. 
  • South Carolina taxpayers can score a $50 tax deduction by donating a dead deer to the poor.
  • If you donated homemade treats to a bake sale this year, you can claim the cost of those ingredients as charitable deductions. Same goes for other out-of-pocket donations you made to good causes in 2019. 
  • In Hawaii, going green pays: plant state-approved trees and earn up to $3,000 in deductions. 

You can get away with some pretty funky deduction claims. Things that don’t qualify, though? Weddings, dogs, and fallout shelters. And yes, people really did try to get these by the IRS

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