Tax Tip: Your Expenses May be Eligible for Itemized Deductions

If you have big plans to sell or buy a home, donate some old items, or hit the casino, you may itemize some of these activities as deductions. Here are some examples:

If you are refinancing your home, you can deduct some of your mortgage interest. There are some limits to these deductions, though. The IRS limits the deduction to interest paid on a loan secured by the taxpayer’s primary or secondary home. When refinancing, you must use the loan to buy, build, or substantially improve your primary or secondary home.

If you buy a new home, you can deduct mortgage insurance if you pay $750,000 in qualifying debt for a first and second home or $375,000 when married filing separately.

Now is a great time to go through your things and donate old clothes, furniture, or home goods you no longer need. Even better, these donations may qualify for a tax deduction if you itemize the deductions and show proof of the donations.

In addition to donating items, you can deduct mileage on your vehicle for services done for a qualified charity.

Lastly, you can itemize and deduct gambling losses up to the amount of gambling winnings.

*This information is not intended to substitute for specific individualized tax advice. We suggest you discuss your specific tax issues with a qualified tax professional.

Tip adapted from IRS.gov5

Footnotes and Sources

  1., April 5, 2023