What Can You Deduct on Taxes in 2018
9 deductions you can no longer claim when filing income taxes
The Taxation Cuts and Jobs Act lowered individual tax rates, nearly doubled the standard deduction and boosted tax credits for families with children. Merely while the new law provided some new tax breaks, it also erased many deductions that millions of taxpayers claim every year.
As of this twelvemonth, these pop deductions are barred (and are scheduled to remain so through 2025 barring congressional action). Hither's a look at nine tax deductions that take been eliminated or curbed:
- The tax law is one-twelvemonth-sometime: Here are the winners and losers
- The new, streamlined IRS Form 1040: What you need to know
- Claim these taxation deductions if you're self-employed
Personal exemptions
Last year, everyone could merits this deduction, which was $four,050 for yourself and each family fellow member listed on your revenue enhancement return. And then, if you are single, y'all could claim one exemption, and if married with two children, you would have claimed four personal exemptions.
Lawmakers say that the doubling of the standard deduction effectively replaced this exemption – but that's not exactly true.
- Have an individual filing in 2017. She could have taken her standard deduction of $6,350 and a personal deduction of $4,050, totaling $10,400.
- Under the new taxation law, her personal deduction is naught in 2022 and her standard deduction is $12,000. In this example, the single taxpayer has a larger deduction in 2018.
- Families are in a different situation. In 2017, a family unit of four would have enjoyed a personal exemption of $16,200 ($4,050 x 4) and a standard deduction of $12,700, totaling a combined deduction of $28,900.
- But in 2018, they tin no longer claim the personal deduction, and their standard deduction is $24,000, or lower than the deduction they enjoyed in 2017.
Only families may yet come out ahead, given that some taxpayers lost deductions if their income exceeded certain thresholds. Starting in 2018, the phase-out for the personal exemption and standard deduction for married couples with adjusted gross income above $313,800 (and singles above $261,500) has been repealed. As well, families volition receive higher kid tax credits in 2018, and then those revenue enhancement credits may outset the bear upon of the loss of personal exemptions for families.
Home equity loan interest
The new revenue enhancement constabulary generally limits the deductibility of mortgage interest on up to $750,000 of debt used to acquire a domicile. The new rules also disallow deducting the interest on home equity loans used in many common transactions.
For example, if yous take out a home equity loan on your domicile and used the gain for other purposes, such as college tuition or to pay off credit card debt, then you tin can't treat the interest on that home equity loan as deductible qualified residence interest. If instead yous took out a home equity loan and used the gain to improve your existing home, and so the involvement would exist deductible -- but simply if the loan, when combined with your current mortgage, does non exceed the $750,000 total loan limits under the new rules.
Many homeowners with existing mortgages and abode equity loans will be unaffected because the prior-constabulary-rules are still in identify for them.
Moving expenses
If y'all met specific IRS criteria, and y'all have expenses relating to a move due to a change in your job or business location, your moving expenses would accept been deductible in 2017. In 2015, the last twelvemonth where data is bachelor, approximately ane.1 million taxpayers claimed this deduction, which saved them virtually $3.7 billion.
The taxation law that starts in the 2022 tax twelvemonth eliminates this deduction, which in the past could exist claimed even if y'all didn't itemize your other deductions. Some folks are exempt from this alter, such as members of the military on active duty.
Job expenses
The deductions you've claimed for costs for things related to your task – such every bit license fees, required medical tests, wearable, tools and equipment and unreimbursed standing education – are no longer allowed. The deduction for these costs was just immune to the extent that these costs, when combined with your other miscellaneous deductions exceeded 2 percent of your AGI.
Considering your employer can still deduct these costs, consider asking them to aid towards these expenses.
Tax preparation fees
Like job expenses, the costs you've paid to your tax preparer, when combined with other miscellaneous deductions were deductible to the extent the total exceeded 2 percent of your AGI. This deduction is no longer allowed.
Other miscellaneous deductions
The listing of other deductions – which includes investment advisory fees, investment related fees, credit card convenience fees, IRA account fees, etc. – all which were subject to the 2 percent AGI limit, are no longer allowed.
Parking and transit reimbursements
In the 2022 tax year, workers could receive up to $255 per month from their employer towards parking and transit costs, and employers could deduct these reimbursements, which were likewise taxation-free to the employee. Now employers can no longer deduct these reimbursements, and so more than employers are looking to eliminate these reimbursements to their employees.
Casualty and theft losses
It used to be that if y'all incurred uninsured losses of property due to fires, flood, earthquake or other disasters that were greater than 10 percent of your AGI, the loss could be claimed as a deduction after subtracting $100 for each casualty loss of personal property. Nether the new law, this deduction is only immune for property damaged in areas which are nether a presidential declaration as a disaster area.
Donations to colleges to receive tickets to athletic events
If you donated to a college and received tickets to an athletic event, you are now required to reduce the corporeality of your charitable donation deduction past the value of any tickets you lot receive to attend an able-bodied effect. Surprisingly, this reduction for the value of tickets wasn't required in prior years.
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Source: https://www.cbsnews.com/news/2018-tax-deductions-no-longer-claim-when-filing-income-taxes/
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