Article Bookmarked
Bookmark Removed

8 Tax Deductions Eliminated (or Reduced) Under the New Tax Law


Jan. 30, 2019 Kiplinger

The Tax Cuts and Jobs Act lowered tax rates and nearly doubled the standard deduction, which is expected to reduce taxes for about 65% of taxpayers, according to the Tax Policy Center. But an estimated 29% of Americans will see no change to their tax bill, and 6% of you will pay more. If you’re one of the unfortunate taxpayers who don’t get a lower tax bill, it might be because the tax overhaul scrapped or capped some popular tax breaks.

Personal Exemptions

Deductions for personal exemptions, worth $4,050 for each exemption claimed on your 2017 tax return (for you, your spouse and each of your dependents), were eliminated by the new tax law in favor of a larger standard deduction and an expanded child tax credit.

The former deductions were phased out for taxpayers whose adjusted gross income (AGI) exceeded a certain threshold amount. For 2017, the personal exemption deduction was completely phased out for single taxpayers with an AGI of $384,000, head of household filers with an AGI of $410,150, married couples filing a joint return with an AGI of $436,300, and married taxpayers filing a separate return with an AGI of $218,150.

Moving Expenses

In the past, people who relocated for a job and paid the moving costs could deduct most of their expenses, even if they didn’t itemize. The tax overhaul eliminated that deduction unless you’re an active-duty member of the military.

Alimony

If you’re paying alimony under the terms of a divorce agreement finalized by December 31, 2018, go ahead and deduct your payments. For divorce agreements reached after 2018, though, alimony is no longer deductible, which is why courthouses were very busy at the end of last year. The deduction is also lost if an existing agreement is changed after 2018 to exclude the alimony from your former spouse’s income.

Ex-spouses who receive alimony payments under an agreement finalized or modified after 2018 will no longer have to pay taxes on the money.

Miscellaneous Itemized Deductions

These deductions included the write-off for tax preparation fees, investment fees, hobby losses, job search expenses, safe deposit boxes and unreimbursed business expenses. Previously, taxpayers could deduct these expenses if they exceeded 2% of their adjusted gross income.

The loss of these deductions could be particularly costly for employees with significant unreimbursed business expenses. For example, an employee who uses his or her own car to visit clients—and isn’t reimbursed for the mileage—could end up with a higher tax bill this year. The change could also prove costly for employees who work remotely, since they’ll no longer be allowed to deduct the cost of maintaining a home office. (The new tax law doesn’t affect the ability of self-employed workers to claim a home-office deduction.)

Click “Read More” for the other four.

Read More on Kiplinger

Gene Upshaw Player Assistance Trust Fund

Apply Today

All Resources

Tell Me More

How to Keep Your Insurance Premiums Down After an Accident

Take the right steps after an accident to save some money each month.

Read More

9 Smart Home-Buying Tips From Real Estate Experts

It is the time of year where many people start the process of buying and/or selling their home. Be prepared.

Read More

9 States Where You Can File Your State Tax Return After the Deadline.

April 15th is right around the corner. If you need more time to file taxes, some states let you do so.

Read More

How to Prevent Old Debts from Coming Back to Life

Just when you think you have righted the ship, a collector may call. Do Your research before blindly making a payment.

Read More

Very Low Cholesterol May Increase Stroke Risk

Very low LDL and triglycerides may be harmful to your health.

Read More

Self-Evaluation and "The Four B's"

What do you see when your are evaluating yourself?

Read More

7 Things You Need to “Spring Clean,” Besides Your Home

Think beyond your physical space, what else could use some freshening up?

Read More

Strength training for the lungs

Why heavy breathing could be a shortcut to improving your health and lowering your blood pressure.

Read More