As a police officer, you can incur many expenses related to your job, some of which your employer may always not cover. While recent tax law changes have made it harder to deduct these costs unless you're self-employed, you have general deductions to consider besides specific law enforcement tax deductions that can reduce your taxable income and lead to a slimmer tax bill. These range from getting savings for other interest and tax expenses to deducting medical costs and charity donations.
Law Enforcement Tax Deductions Change
Before the Tax Cuts and Jobs Act that took effect in 2018, police officers could write many types of expenses that their employers didn't reimburse, as long as those added up to more than two percent of their adjusted gross income. This allowed police officers to deduct costs like association dues, uniforms, dry cleaning, business travel, cell phone fees, continuing education courses, protective gear, meals and lodging.
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This law change will stay in effect until 2025. So, you can't claim these kinds of police tax deductions as an employee in 2019 or 2020.
Tax Deductions for 1099 Work
Perhaps you work as an employed officer but have a side gig in the field where you're a 1099 worker. If so, then you could deduct various costs as they'd be considered business expenses. When you file your tax return, you'd fill out an extra form called Schedule C where you can report expenses for travel, equipment, uniforms, cell phone service, insurance, fees and other costs related to your 1099 law enforcement role. You can't include any that are specific to your regular employee job, though.
Plus, you get a few tax deductions for which 1099 workers can automatically qualify. This includes deducting half your self-employment taxes and getting a maximum of 20 percent of your business income deducted when your federal taxes get figured. The latter tax deduction is subject to income limits; for example, you'd need to make no more than $157,500 if you're single to get the full amount or $207,500 if you're married filing jointly.
General Tax Deductions
Even if you don't qualify for any law enforcement tax deductions available, there are plenty of general deductions for all taxpayers. However, you'll find that many will require you to itemize instead of going with the standard deduction. Here are some of the most popular deductions to know:
- Property tax: Whether it's your primary residence or vacation home, you can deduct the property tax paid up to a limit of either $5,000 (married and filing separately) or $10,000 (all others) as long as you itemize.
- Mortgage interest: Those who itemize can deduct their mortgage interest expenses for mortgages of up to $750,000 (homes obtained past Dec. 15, 2017) or $1 million (for homes bought earlier). This works for home equity loan interest too as long as it was used to expand or otherwise improve your home; using the cash to buy a car or pay off other bills wouldn't qualify.
- Student loan interest: Whether you're a student or parent, you don't need to itemize to be able to get a maximum $2,500 tax deduction for student loan interest paid. The IRS sets modified adjusted income limits of either $80,000 (other filers) or $160,000 (joint filers) for this benefit.
- Medical and dental expenses: Itemizers can get some tax savings for these expenses as long as they were paid out of pocket. The catch is the total expenses for the year will need to add up to more than 7.5 percent of the year's gross income, and then you can just deduct the remainder past that threshold.
- State and local taxes: The IRS will let you choose to deduct either the sales taxes paid or the income taxes paid at the state and local levels if you itemize. Along with any property taxes deducted, the combined amount must be no more than $5,000 (married filing separately) or $10,000 (all others).
- Charitable contributions: Itemizing allows you to deduct your charitable contributions subject to different AGI limits based on donation type. If it's cash, you can deduct as much as your whole AGI (up from 60 percent) in 2020; otherwise, the limit for other deductions is usually 50 percent of your AGI at most. If you go with the standard deduction rather than itemize, there's an exception in 2020 due to the pandemic and CARES Act. In that case, you can deduct as much as $300 for qualified cash donations (other donations won't qualify).
- IRS: Publication 529 (12/2019), Miscellaneous Deductions
- Checkli: Tax Deduction List for Police Officers
- Investopedia: 15 Tax Deductions and Benefits for the Self-Employed
- Tax Policy Center: How Are Pass-Through Businesses Taxed?
- IRS: Credits and Deductions for Individuals
- NerdWallet: Mortgage Interest Deduction: What Qualifies in 2020
- IRS: 2019 Instructions for Schedule A
- IRS: Charitable Contribution Deductions
- Kiplinger: Do You Qualify for a $300 Tax Deduction Under the CARES Act?
- IRS: Tax Benefits for Education: Information Center