What Adjustments to 2019 Gross Income Are Available?
Once total or gross income from all sources has been determined, certain adjustments to income are available. These adjustments amount to a reduction in gross income and generally are granted to achieve tax fairness or in recognition of a desirable social objective. Adjustments to income are available regardless of whether a taxpayer itemizes deductions or takes the standard deduction.
The available adjustments to income include:
IRA Contributions. Eligible individuals can contribute and deduct up to $6,000 to an IRA; $12,000 for an eligible married couple, even if one spouse has no earned income. For workers age 50 and older, the IRA contribution limit is $7,000 for 2019.
Education Savings Account Contributions
Subject to income limitations, up to $2,000 per beneficiary (generally a child under age 18) per year may be contributed to an Education Savings Account and deducted; subject to income limitations.
Student Loan Interest Deduction
Up to $2,500 of the interest paid in 2019 on a loan for qualified higher education expenses may be deducted, subject to income limitations.
Health Savings Account Deduction
Contributions to a Health Savings Account, up to specified maximums, may be deducted.
One-Half of SelfEmployment Tax
Self-employed taxpayers generally deduct one-half of their self-employment tax, as determined on Schedule SE.
Self-Employed Health Insurance Deduction
Self-employed taxpayers can deduct 100 percent of the health insurance premiums (including long-term care insurance premiums) they pay for themselves, their spouses and dependents.