Schedule A Deductions: New Law Instills Limitation

While state and local tax deductions are still available on Schedule A, beginning in 2018 through 2025, the aggregate amount of all state and local sales, income and property taxes on this schedule may not exceed $10,000 ($5,000 for married taxpayers filing separately).
State, local and foreign property taxes and sales taxes that are deducted on Schedule C, Schedule E or Schedule F are not capped.
With the increased standard deduction for these years, this limit will not apply if you are no longer itemizing.
Other deductions remaining on Schedule A for 2018 include the following:
  • Personal casualty losses if incurred in a federally declared disaster area.
  • Investment interest to the extent of net taxable investment income, with any leftover interest being carried forward to the next year.
  • Gambling losses to the extent of gambling winnings.
  • Charitable contributions with most gifts deductible up to 50% of AGI (60% for cash contributions) and gifts of stock deductible up to 30% of AGI, with any carryover generally deductible for the next five years.
  • Medical expenses, such as prescription drug co-pays, transportation to and from doctors and other medical appointments, cost of dentures, hearing aids and more, to the extent they exceed 7.5% of AGI (10% after 2018).