Non-Itemized Tax Deductions Under the Law
When they are filing their taxes, taxpayers need to choose between taking the standard deduction and itemizing their deductions. If you choose the standard deduction, you will not be able to claim itemized deductions. These cover many key areas, such as medical costs, charitable donations, state taxes, and various expenses related to owning a home. However, most people take the standard deduction. This is because the Tax Cuts and Jobs Act, which went into effect in 2018, greatly increased the size of the standard deduction. Unless a taxpayer can claim many itemized deductions, they will receive a greater benefit from claiming the standard deduction.
You might think that the standard deduction is the only deduction that you can take if you do not itemize, but this is not completely true. A handful of “above-the-line” deductions are available to taxpayers who do not itemize deductions. These are actually adjustments to income rather than deductions. They are listed in the Adjusted Gross Income section on Form 1040. The Tax Cuts and Jobs Act removed a few of these deductions, although they are expected to return in 2026, barring further reforms to the tax laws. The eliminated deductions include a deduction for employee moving expenses and a deduction for domestic production activities.
Common Types of Above-the-Line Deductions
Some above-the-line deductions are especially useful to aging taxpayers. These include deductions for contributions to health savings accounts from your personal funds, as well as contributions to IRA accounts (within limits) in many cases. If you withdrew your savings early from accounts at banks or other financial institutions, you can deduct any related penalties. If you are self-employed, you can claim a deduction for your contributions to your retirement plans and another deduction for your health insurance premiums. (That deduction is limited to the profit that you receive from your business.) You also can claim a deduction for half of your self-employment taxes related to Social Security and Medicare, up to an annual maximum amount.
Certain deductions may be helpful to people who are pursuing or who have pursued higher education. If your adjusted gross income does not reach a certain threshold, you can deduct a certain amount of the interest on your student loans. You also may be able to deduct a certain amount in tuition and fees for higher education. This deduction also applies to higher education for your spouse or a dependent. If you take either the American Opportunity tax credit or the Lifetime Learning tax credit, though, you cannot use this deduction.
There are a few other deductions as well. If you are a member of the U.S. military on active duty, or if you are a spouse or dependent of a service member, you can deduct moving and storage expenses if you are required to move by a military order that is related to a permanent change of station. Another deduction applies to alimony for divorces that occurred before 2019, although this area of the tax law has become more complex since the enactment of the Tax Cuts and Jobs Act.
