The following tax deductions are among those to which you can say farewell, at least as far as your next tax return is concerned.
5 tax breaks no longer available
5 tax breaks no longer available
1. Personal exemptions
For 2017, eligible taxpayers could claim an exemption for themselves and a spouse as well as exemptions for dependents. Each such exemption reduced taxable income by $4,050.
For 2018, however, there are no personal exemptions. Tax reform suspended them, basically meaning it made them temporarily unavailable.
Specifically, personal exemptions and many other tax breaks that were suspended by the Tax Cuts and Jobs Act will be unavailable for tax years 2018 through 2025.
2. Moving expenses
You cannot deduct moving expenses from your 2018 taxable income, either. Tax reform suspended this deduction for everyone except active-duty members of the U.S. armed forces who are ordered to relocate.
“During the suspension, no deduction is allowed for use of an automobile as part of a move,” states IRS Publication 5307, which outlines how tax reform impacts individuals and families in tax year 2018.
Tax reform also suspended the exclusion for qualified moving expense reimbursements for everyone but active-duty military members. So, if your employer reimbursed you for moving expenses in 2018, that reimbursement will be considered taxable income.
3. Casualty and theft losses
Tax reform modified the deduction for net casualty and theft losses, making it available only to taxpayers who suffered such losses that were attributed to a federally declared disaster.
Other requirements for this deduction remain in place, however.
“The loss must still exceed $100 per casualty and the net total loss must exceed 10 percent of your [adjusted gross income],” states Publication 5307.
4. Job-related expenses
Previously, folks who itemized their tax deductions could write off what the IRS refers to as miscellaneous deductions to the extent that they exceeded 2 percent of such taxpayers’ taxable income. But miscellaneous deductions are among those that have been suspended.
Miscellaneous deductions include unreimbursed employee expenses, such as:
So, if you paid for such expenses out of your own pocket in 2018 and were not reimbursed for them by your employer, you cannot write them off on your next tax return.
5. Tax preparation fees
This is another miscellaneous deduction and thus has been suspended. It includes:
The cost of tax preparation software programs
The cost of tax publications
Fees for filing tax returns electronically
So, if you paid any of these expenses in 2018, you can’t write them off on your next tax return.
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Congress has passed the largest piece of tax reform legislation in more than three decades. The bill went into place on January 1, 2018, which means that it will affect the taxes of most taxpayers for the 2018 tax year.