Ask the Tax Editor: Federal Income Tax Deductions

Each week, in our Ask the Editor series, Joy Taylor, The Kiplinger Tax Letter editor, answers questions on topics submitted by readers. This week she's looking at five questions on the whether moving expenses and more are tax-deductible. (Get a free issue of The Kiplinger Tax Letter or subscribe.)

1. Moving expense deduction

Question: Can I deduct moving expenses on my 2025 Form 1040? I'm talking about the cost of the moving van, mileage, food, lodging, etc.

Joy Taylor: Unfortunately, moving expenses are generally not deductible. It used to be that when you relocated for a new job, you could deduct the cost of your move on Form 1040. The 2017 Tax Cuts and Jobs Act temporarily eliminated the write-off from 2018 through 2025. And the One Big Beautiful Bill that lawmakers enacted in July 2025 made this repeal permanent.

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There is one exception. Active-duty military personnel who move pursuant to military orders can still deduct their moving costs.

2. Interest write-off

Question: Rather than obtaining a mortgage when I bought my primary home last year, I borrowed against my investment securities at my brokerage firm with the intention of paying off a portion of the borrowed funds within a year or a bit more. I paid monthly interest on the borrowed funds until I paid off the debt after 15 months. Is the interest on the borrowed funds tax-deductible as home mortgage interest?

Joy Taylor: I don't think you would be able to take a federal tax deduction for the interest on the borrowed funds unless your home secured the loan. According to the IRS in Publication 936, Home Mortgage Interest Deduction:

"Generally, home mortgage interest is any interest you pay on a loan secured by your home (main home or a second home). The loan may be a mortgage to buy your home, or a second mortgage."

The IRS goes on to say: "Interest on home equity loans and lines of credit are deductible only if the borrowed funds are used to buy, build, or substantially improve the taxpayer’s home that secures the loan. The loan must be secured by the taxpayer’s main home or second home (qualified residence), and meet other requirements."

You said you borrowed against your securities. That makes it sound to me that your home didn't secure the loan. As a result, I don't think the interest qualifies as home mortgage interest.

Individual taxpayers can also deduct investment interest in certain cases. But again, I don't think your situation would qualify. That's because you didn't use the proceeds from the loan to acquire investment property. The tax rules allow, subject to limitations, a deduction for investment interest for people who borrow money to buy property held for investment. Here is how the IRS defines investment property for this purpose in Publication 550, Investment Income and Expenses:

"Property held for investment includes property that produces interest, dividends, annuities, or royalties not derived in the ordinary course of a trade or business. It also includes property that produces gain or loss (not derived in the ordinary course of a trade or business) from the sale or trade of property producing these types of income or held for investment (other than an interest in a passive activity). Investment property also includes an interest in a trade or business activity in which you did not materially participate (other than a passive activity)."

Unfortunately, a personal residence generally is not investment property for this purpose.

3. Senior deduction

Question: What is the $6,000 write-off for filers age 65 and older? Can you furnish me with detailed information?

Joy Taylor: The One Big Beautiful Bill that federal lawmakers enacted last July includes various tax changes for individuals. One of them is the $6,000 senior deduction. This write-off is for taxpayers who are 65 and older. Married couples with both spouses 65 and older can deduct $12,000 on a joint return. The deduction is available to taxpayers who claim the standard deduction and to those who itemize on Schedule A. The deduction is temporary, first taking effect on 2025 tax returns filed this year and ending after 2028.

Not every senior will qualify for the deduction. It begins to phase out at modified adjusted gross income (AGI) above $150,000 on joint returns and $75,000 on other returns. It is fully phased out once modified AGI reaches $250,000 for joint filers and $175,000 for others. Modified AGI for this purpose is AGI plus any foreign earned income exclusion, foreign housing exclusion, and certain income excluded from gross income because it was received from sources in Puerto Rico, American Samoa, Guam and the Northern Mariana Islands.

Each filer 65 and older must have a Social Security number to claim this tax deduction. And if married, you must file a joint return to claim the deduction.

Taxpayers who qualify for the $6,000 senior deduction use the new IRS Schedule 1-A to claim it. Fill out Part I of Schedule 1-A to calculate your modified AGI, and then complete Parts V and VI. Transfer the amount on line 38 of Schedule 1-A to line 13b of the 2025 Form 1040 (or line 13c of the 2025 Form 1040-SR). You can find the instructions for this Schedule in the Form 1040 instructions.

4. No deduction for gifts

Question: I gifted $5,000 to each of my grandchildren last year. Where do I deduct the gift on my federal tax return?

Joy Taylor: Gifts are not deductible to the donor for federal income tax purposes. So you can't deduct the gifts to your grandchildren on your Form 1040. The gifts are also not taxable to your grandchildren.

5. Charitable contribution deduction

Question: I donated publicly traded securities to a tax-exempt charity. The charity gave me a letter acknowledging the donation and describing what I gave, but didn't indicate the value of the contribution. Is this correct?

Joy Taylor: The charity is correct. The written acknowledgment letter that a charity gives you when you make a donation only includes the amount of a cash contribution. If you make a non-cash contribution, the letter is only required to provide the description of the contribution, but not the value.

For a donation of publicly traded securities, including shares in mutual funds, your charitable contribution amount is the fair market value of the securities on the date of the donation. The fair market value of the donation is the average between the highest and lowest quoted selling price on the date of the contribution.

About Ask the Editor, Tax Edition

Subscribers of The Kiplinger Tax Letter, The Kiplinger Letter and The Kiplinger Retirement Report can ask Joy questions about tax topics. You'll find full details of how to submit questions in each publication. Subscribe to The Kiplinger Tax Letter, The Kiplinger Letter or The Kiplinger Retirement Report.

We have already received many questions from readers on topics related to tax changes in the One Big Beautiful Bill, retirement accounts and more. We will continue to answer these in future Ask the Editor roundups. So keep those questions coming!

Disclaimer

Not all questions submitted will be published, and some may be condensed and/or combined with other similar questions and answers, as required editorially. The answers provided by our editors and experts, in this Q&A series, are for general informational purposes only. While we take reasonable precautions to ensure we provide accurate answers to your questions, this information does not and is not intended to, constitute independent financial, legal, or tax advice. You should not act, or refrain from acting, based on any information provided in this feature. You should consult with a financial or tax advisor regarding any questions you may have in relation to the matters discussed in this article.