What’s Tax Deductible? A Guide to Mortgage Interest, Long-Term Care, Funeral Expenses, Student Loans, and Roth IRA Contributions

As the tax filing deadline approaches, many individuals and families are left wondering what expenses are tax-deductible and what aren’t. From mortgage interest and medical expenses to funeral costs and student loans, the tax rules may vary.

In this article, we’ll cover the basics of what expenses are tax-deductible and what records you’ll need to keep to support your claims.

Key takeaways

• Expenses like student loan interest payments, mortgage interest, long-term medical expenses, and more may be eligible for a tax deduction.
• General funeral expenses typically aren’t tax-deductible.
• Moving expenses are only tax-deductible for military members and intelligence personnel.
• Roth IRA contributions aren’t tax-deductible, but they grow tax-free.

Is mortgage interest deductible?

The mortgage interest deduction is one of the most popular tax deductions available to homeowners who itemize, though it’s essential to understand the rules to ensure you’re taking advantage of this valuable tax break.

To qualify for the mortgage interest deduction, the loan must meet the following requirements:

• The loan must be secured by your primary residence or second home.
• The loan must be used to buy, build, or substantially improve the home.
• To deduct the full amount of interest paid, the total amount of debt on the mortgage (including any home equity debt) cannot exceed $1 million ($500,000 if you’re married and filing separately) for mortgages originated on or before December 15, 2017.
• To deduct the full amount of interest paid, the total amount of debt on the mortgage (including any home equity debt) cannot exceed $750,000 ($375,000 if you’re married and filing separately) for mortgages originated on or after December 16, 2017.

Additionally, you can only deduct the interest on the loan that was used to buy, build, or substantially improve the home secured by the loan. If you use the loan for other purposes, such as to pay off credit card debt or finance a vacation, you cannot deduct that portion of the interest.

Is long-term care insurance deductible?

Long-term care insurance premiums may be tax-deductible if they meet certain requirements. To qualify, the premiums must be paid to cover long-term care services, such as:

• Assisted living or nursing home care
• In-home care services
• Adult day care services
• Respite care services

To qualify for the deduction, you’ll need to itemize your medical expenses on Schedule A (Form 1040).

Like other medical expense deductions, you can only deduct what exceeds 7.5% of your adjusted gross income (AGI). For tax year 2025, this means that if your AGI is $50,000 or less, you can only deduct medical expenses that exceed $3,750.

Are funeral expenses tax-deductible?

Generally, funeral expenses are not tax-deductible on your personal income tax return. However, there is an exception for estates that are subject to tax. If you’re the executor of an estate, you may be able to claim a deduction for funeral expenses on behalf of the estate. There are some rules to know when it comes to this deduction, including:

• Ensure the expenses are paid from the estate’s funds, not by a family member or friend out of pocket (unless that person is formally reimbursed by the estate).
• Itemize the expenses on IRS Form 706, Schedule J, the United States Estate Tax Return.
• Subtract any reimbursements from the total expenses, such as the Social Security lump-sum death benefit or VA burial allowances.

Are student loans tax-deductible?

The interest on student loans may be tax-deductible, but there are income limits and other requirements that apply. To claim this deduction, all of the following must apply:

• In 2025, you paid interest on a qualified student loan. 
• You are legally required to pay interest on a qualified student loan and you personally paid it. If someone else, such as a parent or grandparent, paid the interest on your behalf, you cannot deduct it. 
• You cannot deduct interest on payments made by your employer on your behalf if these payments were excluded from your gross income.
• Your filing status is not “married filing separately.”
• Your modified adjusted gross income (MAGI) is less than a specified amount.* 
• If filing jointly, neither you nor your spouse can be claimed as dependents on another person’s tax return.

* For 2025, the amount of your student loan interest deduction is gradually phased out if your MAGI is between $85,000 and $100,000 ($170,000 and $200,000 if you file a joint return). You can’t claim the deduction if your MAGI is $100,000 or more ($200,000 or more if you file a joint return). You do not have to itemize to take advantage of this deduction.

If you’ve received student loan forgiveness, it’s important to note that as part of the tax policy changes in the OBBBA, student loan forgiveness will no longer be tax-free after 2025.

Are Roth IRA contribution tax-deductible?

Contributions to a Roth IRA are not tax-deductible, but the funds grow tax-free and can be withdrawn tax-free in retirement or earlier under certain circumstances. This can be a great way to save for retirement, especially if you’re self-employed or not covered by an employer-sponsored retirement plan.

Roth IRA contributions are limited to $7,000 for tax year 2025 ($8,000 for age 50 and over). However, the ability to contribute to a Roth IRA is subject to an income limitation.

For 2025, Single/Head of Household can contribute to a Roth if MAGI is under $150,000. Phase-out begins between $150,000 – $165,000 with no contributions allowed over $165,000. For Married Filing Jointly filers, the full contribution is allowed if MAGI is under $236,000.Phase-out begins between $236,000 – $246,000 with no contribution over $246,000. Taxpayers have until April 15, 2026 to make their contributions for tax year 2025.

File with TurboTax for an easy tax experience

As you can see, determining what expenses are tax-deductible can be complex and depends on various factors, including the type of expense, your income level, and how you use the funds. To ensure you’re taking advantage of all the tax breaks available to you, it’s essential to keep accurate records and consult with a tax professional if you’re unsure.

With TurboTax, you can file your taxes with confidence and accuracy. Let TurboTax guide you through the tax-filing process, asking you simple questions and filling out the right forms for you. Plus, our team of tax experts is available to help you with any questions you may have.

File your taxes today and take advantage of all the tax breaks available to you!