New tax bill with significant reforms is out and taxpayers must expect numerous changes in 2018. Deductions for high standard, decrease tax rates and child higher tax credit for families are some perks for each taxpayer. For these particular tax breaks, the lawmakers took numbers deductions away that was important for taxpayers to decrease their tax bills. Unfortunately, numerous tax deductions are going away in 2018. Some critical deductions were famous, but now these are disappearing. Taxpayers should carefully look at their tax statement to see new deductions.
Personal Exemption
The tax reform bill has a significant twist because personal exemptions are going away that allowed a taxpayer to decrease his/her taxable income by almost $4,050 for each person. Numerous policymakers debated that these exemptions were merged into standard deductions, but the increase in the deduction standards under latest tax reform was not enough for the compensation of this loss. It can be a significant loss for numerous taxpayers because they depend on personal exemptions to decrease their tax bills.
Interest on Home Equity Loan
Under new tax reforms, the mortgage interest is deductible on the purchase of a loan to almost $750,000, but interest deduction on an equity loan becomes nondeductible in 2018. Unlike loan purchases, there is no grandfathering endowment for current home equity loans. If deductions are essential for you to, it is time to look at potential repayment of credit to avoid higher tax bills.
Moving Expenses
Taxpayers can’t deduct moving expenses after 2017. To make these expenses deductible, the moving should be motivated by a change in job. With the start of a new career almost 50 miles away from your current residence or old employment, you can get exemption of moving expenses. You can deduct these expenses without any itemization.
Theft Losses and Casualty in Disaster Zones
Under the old law, the casualty losses were eligible for itemized deductions to the extent that they surpass $100 + 10% of AGI (adjusted (modifiable) gross income). The events may include natural disasters, fires, robberies and other succeeding occurrences. The latest law preserves the deductions for catastrophe for which declaration of presidential disaster location was possible.
Job Expenses
Money that you spend on particular job costs like regulatory and license fees need consistent unreimbursed education, and the medical test was accessible as itemized deductions to a specific extent. Miscellaneous deductions may exceed almost 2% of AGI. It is one of the tax deductions going away in 2018. Now you can’t deduct these costs, and it becomes more critical to get employers to make payment on your behalf.
Transit Reimbursement and Subsidized Parking
Workers were eligible under tax laws to get almost $255/month from employers to sponsor parking cost and transit passes. Workers may not understand these perks in revenue and companies can deduct them. The business deductions for this cost may go away, and it will lead some corporations to stop these programs for workers.
Fees for Tax Preparation
Similar to job expenses, the costs to pay taxes may be available as itemized miscellaneous deductions. It is not available anymore, and the price for the preparation of taxes will not be deductible in 2018.
Miscellaneous Deductions
Numerous miscellaneous deductions are subject to 2% limitation for AGI, but this tax deduction is not available in 2018. These may include investment expenses, fees, and convenience fees for the use debit or credit card for the payment of taxes and trustee charges for IRA if payment is made separately.
Donations for College for Athletic Seats
With this controversial provision, donor got a chance to give money to educational institutes and deduct this full amount. If they got tickets or seating rights back to athletic events, they still get this benefit. Unfortunately, this perk is going away, and donor can’t reduce the total deductions. They can deduct the value of tickets.
Alimony Deductions
Couples set alimony agreements in the past that were allowed for deductions from federal taxes. It is one of the tax deductions going away in 2018. The money is not exempted from tax. While filing a tax return for 2018, you have to consider all these changes and see new exemptions to decrease your tax burden.
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