Are you a homeowner looking for good tax deductions? For most Florida homeowners, the first thing to check is mortgage interest and property taxes. Mortgage interest can be a tax deduction if you choose to itemize deductions. A tax filer can either itemize deductions or take the standard deduction. They cannot do both.
How does the amount of mortgage interest compare to your standard deduction amount? Once you add in the other eligible deductions does the total for all itemized deductions exceed the standard deduction? For most Florida tax filers, the standard deduction amount provides a larger deduction. However, it is a good idea to check your specific numbers.
Your standard deduction amount is based on your filing status. Find out more about your filing status at https://www.irs.gov/help/ita/what-is-my-filing-status
Standard Deduction Amounts for 2023 Tax Returns (that’s the return due April 15, 2024)
Under Age 65
Single: $13,850
Married Filing Jointly: $27,700
Head of Household: $20,800
*Married Filing Separately: $13,850
Age 65 or older (Born before Jan 2,1959)
Single: $15,700
Married Filing Jointly (1 spouse age 65 or older): $29,200
Married Filing Jointly (both age 65 or older): $30,700
Head of Household: $22,650
*Married Filing Separately: $15,35
*When a married couple files separate returns and one spouse itemizes deductions, the other spouse cannot claim the standard deduction. They both must itemize their own deductions.
Standard deduction amounts are increased if you are legally blind. Find out more at https://www.irs.gov/taxtopics/tc551
What Can you Itemize?
Expenses that can be itemized under certain conditions: medical & dental expenses, mortgage interest, taxes paid, charitable contributions, casualty & theft losses, and gambling losses. A complete list of what you can itemize is on Schedule A https://www.irs.gov/pub/irs-pdf/f1040sa.pdf
Medical and Dental Expenses: The amount of the unreimbursed expenses that exceed 7.5% of your Adjusted Gross Income (AGI) can be deducted. AGI does not include tax deferred contributions to a retirement plan or tax-exempt contributions to a Health Savings Account.
Example Jack & Jill, Married Filing Jointly, AGI = $70,000: They can itemize qualified medical expenses that exceed $5,250 (70,000* .075 = $5,250). If they have $6,000 in unreimbursed medical expenses, they can deduct $750 ($6,000 – $5,250).
Taxes You Paid: This category includes state & local income taxes, sales tax, and property taxes. You may deduct either state & local income taxes or sales taxes. Some states like Florida do not have an income tax. Tax software will calculate the sales tax deduction amount, or you can use the IRS calculator https://www.irs.gov/credits-deductions/individuals/use-the-sales-tax-deduction-calculator The total allowed for the “taxes you paid” category is $10,000.
Mortgage Interest: Mortgage interest on your primary or second home on a loan that does not exceed $750,000 (or $1,000,000 loan incurred before December 16, 2017). The loan must have been used to buy, build, or substantially improve your home. Interest paid for a home equity line of credit used to eliminate credit card debt is not deductible.
Mortgages taken out before Oct 12, 1987, are fully deductible. Find out more at https://www.irs.gov/publications/p936
Gifts to Charity: Gifts made by cash, credit card, check, and donations of property made to a qualified charity (such as church) are deductible. Find out more at https://www.irs.gov/charities-non-profits/charitable-organizations/charitable-contribution-deductions
Casualty and Theft Losses: The losses must have happened because of a federally declared disaster. Find out more at https://www.irs.gov/taxtopics/tc515
Gambling Losses: Gambling losses (including the cost of lottery tickets) are limited to the amount of your gambling winnings.
UF/IFAS Hillsborough County Extension offers free, online tax software for people with Adjusted Gross income up to $79,000. The software will help you calculate tax deductions and tax credits. For more information contact Lisa at lmleslie@ufl.edu
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