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Understanding Idaho Itemized Deductions

The amount of the standard deduction depends on your filing status (single, married filing jointly or married filing separately).

For individuals, the itemized deductions go on Schedule A of IRS Form 1040. 

Examples include medical expenses, home mortgage interest, real estate taxes, and charitable contributions.

2% AGI

Miscellaneous Itemized Deductions are the least desirable category of itemized deductions for individuals. You can deduct miscellaneous itemized deductions only to the extent that they exceed two percent of your Adjusted Gross Income.

For many individuals, this limitation effectively eliminates any benefit from miscellaneous itemized deductions.

Two of the more common examples of miscellaneous itemized deductions are:

  • unreimbursed employee expenses and 
  • investment expenses

 

Does the New 20% Deduction for Idaho Business Phaseout?

Phaseout for New 20% Deduction

If your pass-through Idaho business is an in-favor business and it qualifies for tax reform’s new 20 percent tax deduction on qualified Idaho business income, you always benefit, including being above, below, or in the expanded wage and property phase-in range. 

 On the other hand, if your Idaho business is a specified service trade or business (doctors, lawyers, accountants, actors, athletes, traders, etc.), it is in the out-of-favor group, and you benefit only when you are in or below the phaseout range.

 Once your taxable income exceeds the threshold amounts above, you arrive in one of the four possible categories below:

 1. The phase-in range for a non-specified service trade or Idaho business

2. The phaseout range for a specified service trade or Idaho business

3. Above the phase-in range for an in-favor non-specified service trade or Idaho business

4. Above the phaseout range for an out-of-favor specified service trade or Idaho business

 

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