Question

Discuss the various Schedule A Itemized Deductions, the Standard Deductions for each Filing Status, the Additional Standard Deduction, and those taxpayers eligible for the Qualified Business Income Deduction.

For Tax Years 2019 and 2020, taxpayers can claim medical and dental expenses that exceed 7.5% of AGI when they itemize on a Schedule A.

The citation for the new tax law is the Further Consolidated Appropriations Act, 2020 (Public Law 116-94), which states:

SEC. 103. REDUCTION IN MEDICAL EXPENSE DEDUCTION FLOOR.

(a) IN GENERAL.—Section 213(f) is amended to read as follows:
‘‘(f) TEMPORARY SPECIAL RULE.—In the case of taxable years beginning before January 1, 2021, subsection (a) shall be applied with respect to a taxpayer by substituting ‘7.5 percent’ for ‘10 percent’.’’...
(c) EFFECTIVE DATE.—The amendments made by this section shall apply to taxable years ending after December 31, 2018.

Answer 1

Schedule A Itemised standard deduction are as follows:

• Medical and dental expenditure
• Taxes you paid
• Interest you paid
• Gifts to charity
• casuality and theft losses (but only if the property is located in a federally declared disaster area
• Other Itemised deductions

Standard deduction for each filing status are as follows:

Particulars	2019	2020
Single or married filing separately	$12,200	$12,400
Married filing jointly or a qualified widow (er)	$24,400	$24,800
Head of household	$18,350	$18,650

An additional deduction may be taken by those who are age 65 years or older or blind as follows:

1. Single or Head of household filers - $1,650
2. Married filing jointly - $1,300 for each spouse who is 65 or older or blind

Tax payers eligible for Qualified business income deduction are:

Individuals and trusts and estates with qualified business income, and tax payers who have REIT dividends or qualified PTP income may be eligible to take Qualified business income deduction