Tax Deductions for Police Officers
Last Updated: June 03, 2022 • 5 min read
Author: Zach L.
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As a police officer, you have expenses that you will incur for your job and a fair amount of them you are not going to be able to have your employer reimburse. Recent tax law updates have reduced the number of expenses that you can deduct unless you are self-employed.
The good news is there are still general deductions for you to take into consideration. These general deductions can still reduce your overall taxable income and significantly reduce your tax bill come April. General deductions can be anything from loan interest to charitable deductions. We’ll dive into that here soon.
Law Enforcement Tax Deductions Change
In 2018, the Tax Cuts and Jobs Act took effect. This stopped the tax breaks for the police force on many types of expenses that their employers wouldn’t reimburse, and the main qualifier was if the total amount of expenses were greater than two percent of their adjusted gross income. This meant that police officers were able to deduct many costs like uniforms, association dues, business travel, dry cleaning, protective gear, meals, cell phone fees, continuing education courses, and lodging. The Tax Cuts and Jobs Act will be in effect until 2025. This means that the police tax deductions listed above cannot be taken as an employee until the 2025 tax year.
Tax Deductions for 1099 Work
Everyone seems to have a side hustle or two these days. Which is a great idea for diversified income streams, and helps move us towards the seven income streams that millionaires have.
If you are a 1099 worker, that allows you to have different work-related deductions than as a W2 worker because they become business expenses. When you are filing your tax return, you will end up with an extra form to fill out, Schedule C, which is used for reporting necessary expenses you incurred for your 1099 security or law enforcement role. These expenses include equipment, uniforms, travel, insurance, fees, cell phone plans, etc.
NOTE: You can’t write off expenses from your time as full-time law enforcement officers as business expenses for your independent contractor job.
There are also tax deductions that are automatically part of being a 1099 worker. These include deducting half of your self-employment taxes and also getting up to 20% of your business income deducted when your federal government taxes are determined. Your business income tax deductions have a ceiling referred to as income limits. As a single person, the max is $157,500 and if you are married filing jointly it is a higher limit of $207,500.
General Tax Deductions
Maybe you don’t end up qualifying for any of the law enforcement tax deductions available, that’s okay there are still many general deductions for all taxpayers to enjoy. If you are going to use these general tax deductions, you will need to itemize your tax deduction instead of taking the standard deduction. As of 2022, the standard deduction for single filers is $12,950, and married couples filing jointly have a standard deduction of $25,900. Some of the most used tax deductions include:
- Mortgage interest. If you are planning on deducting your mortgage interest expenses you are able to deduct if your mortgage is under $750,000 if you bought your home after Dec 15, 2017. If you bought your home before then, your mortgage can be up to $1 million. You can also deduct your Home Equity Loan interest if the funds were used to improve your home, If you bought a boat or paid other bills with the HELOC you are out of luck.
- Property tax. Those who itemize can deduct their property tax paid up to a limit of $5,000 (married and filing separately), or $10,000 (everyone else). This works for your primary residence, vacation home, etc.
- State and local taxes. This one is slightly different. The Internal Revenue Service (IRS) allows for a choice between a deduction for the state sales tax and local sales tax paid or the state income tax and local income tax paid. This gets pooled together with the property tax deduction and has the same limits.
- Student loan interest. Parent or student, there is no need to itemize to get a maximum $2,500 tax deduction for the student loan interest you have paid.
- Medical and dental expenses. If you pay for these expenses out of pocket, and they were larger than 7.5% of your gross income you can deduct anything more than that threshold if you itemize.
- Charitable contributions. Itemizing lets you deduct your charitable contributions depending on AGI limits grouped by donation type. The limit for most charitable contribution deductions is up to 50% of your annual gross income. This can include things like tithing for religious followers.
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