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 Prepare Your Credit for Retirement

Credit isn’t only a young person’s game. Make sure it doesn’t derail your plans.

Read More

How to Prioritize Your Debts When Money is Tight

A recent survey found finances remain a top stressor among all Americans.

Read More

4 Mindful Spending Habits That Will Save You Money

Spending money mindlessly is easy to do. Check yourself with these tips.

Read More

Five Steps to Achieving Financial Stability After a Natural Disaster

Are you prepared for financial recovery in the aftermath of an environmental event?

Read More

Hearing Aids Can Reduce Depression and Dementia Risk

Hearing loss is associated with changes in the brain and may affect the ability to form new memories.

Read More

What Makes a Successful Startup Team

Starting your own business? Your leadership on the field can help you achieve success.

Read More

New "Veggie" Burgers Storm the Market.

They might be better for the planet, but are plant-based burgers good for you?

Read More

Getting goal-ready: how mindfulness can help you tackle anything

A healthy mind — calmer, clearer, and contented — is less prone to being emotionally reactive during the highs and lows.

Read More