Although the 2018 Tax Cuts and Jobs Act provided some new tax breaks, it also erased many deductions that you may have routinely claimed. The following eliminated deductions are scheduled to remain through 2025, pending congressional action.
- Home Equity Loan Interest.
According to the new tax law, the deduction for home equity interest from 2018 to 2025 has been suspended, unless the loan is used to buy, build, or substantially improve the home that secures the loan.
- Moving Expenses.
Although in the past moving expenses could be claimed even if you didn’t itemize your other deductions, the 2018 tax law eliminates this deduction. Members of the military on active duty are exempt from this change.
- Personal Exemptions.
Lawmakers say that doubling the standard deduction effectively replaced the personal exemption. A personal exemption is known as a specific amount of money that you could deduct for yourself and each of your dependents.
- Job Expenses.
Deductions claimed for job-related costs, such as license fees, required medical tests, clothing, tools, equipment, and unreimbursed continuing education, are no longer allowed. Because your employer can still deduct these costs, consider asking them to help towards these expenses.
- Tax Preparation Fees.
Tax preparation fees, when combined with other miscellaneous deductions were deductible to a certain extent in the past. These fees include payments to accountants, tax prep firms, as well as the cost of tax preparation software. This deduction is no longer allowed.
- Parking and Transit Reimbursements.
In the past, employees could take advantage of a perk offered by many employers in which parking and transit pass costs, up to $255 per month, were reimbursed by their employers tax-free. Now, employers can no longer deduct these reimbursements.
- Casualty and Theft Losses.
Previously, if you experienced uninsured losses of property due to fires, flood, earthquake, or other disasters, the loss could be claimed as a deduction after subtracting $100 for each casualty loss of personal property. Under the new law, this deduction is only allowed for property damaged in areas which are under a Presidential Declaration as a national disaster.
- Donations to Colleges to Receive Tickets to Athletic Events.
Donors who make a contribution to or for the benefit of a college or university in exchange for the right to purchase tickets or seating at an athletic event in the university’s stadium can no longer take a charitable deduction.
- Other Miscellaneous Deductions
The list of other deductions, which includes investment advisory fees, investment related fees, credit card convenience fees, IRA account fees, etc., are no longer allowed.
For more information, always consult a Certified Public Accountant. Submitted by: Dennis Gallant, Senior Manager, Tax Services, Thomas Howell Ferguson P.A. CPAs. To ask Dennis a question, contact him here.