Thanks to the New Tax Law You Can’t Claim These Deductions Anymore

Prepare for your taxes now by knowing what's changed.
  • The 2018 tax filing season begins in late January 2019.
  • The passage of the Tax Cuts and Jobs Act means some stark changes for tax filers and the deductions they can take.
  • One of the most notable changes is the increase in standard deductions for individuals and married households.
  • Tax filing season is only a couple months away. With the passage of President Donald Trump’s Tax Cuts and Jobs Act last year, filling out your tax forms might require a different strategy than what you’ve used in previous years. Here’s a breakdown of some of the more notable changes you need to consider for the 2018 tax filing season, including multiple deductions that are now kaput.

    Increase to the Standard Deduction

    Probably the most useful change for individuals and families is the increase in the standard deduction. The amount has almost doubled to $12,200 for individuals and $24,400 for families. These increases are supposed to increase the average household income by $4,000.

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    No More Personal Exemptions

    Although increasing the standard deduction might be a good thing, you can no longer claim a personal exemption for yourself, your spouse or your dependents. This means you can no longer reduce your taxable income by $4,050 for each eligible member of your household.

    Related: To Boost Your Income Less Than 2%, Trump Just Increased the Deficit by Billions

    State and Local Tax Caps

    Known as SALT, the new tax law limits this tax deduction to $10,000, whereas previously it was unlimited. This could be a big drawback for people living in California, New York, South Carolina and other places where people pay high property taxes.

    Reduced Mortgage Interest Deduction

    New homeowners buying in 2018 will only be able to deduct up to $750,000 worth of interest from qualified residence loans, whereas before it was up to $1 million. This could pose another problem for residents living in states with high home prices that require larger mortgages, like New York and California. Furthermore, you will also be unable to deduct the interest from home equity loans unless they were used to “buy, build, or substantially improve your main home or second home,” according to the IRS.

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    No More Job Expenses Claims

    You could previously claim unreimbursed job-related purchases so long as they were more than 2 percent of your adjustable gross income. Unfortunately for strapped employees, that deduction will be eliminated for 2018’s taxes.

    No More Moving Expense Claims

    Transients could’ve deducted moving expenses from their taxes provided they met certain criteria, but the new tax law eliminates this, with the exception of military service members moving to new duty stations.

    Check Out: See Who Will Be Paying More in Taxes — It Might Be You

    No More Natural Disaster Deductions

    It’s been an intense several years for residents dealing with natural disasters; the California wildfires are just the most recent example. Prior to the new tax law, victims of circumstance could deduct at least half of the expenses they incurred. However, under the new tax law, you must live in a “presidentially designated disaster area” to be eligible for the deduction.

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    Other Miscellaneous Deductions That Have Been Eliminated

    The new tax law will also eliminate multiple deductions that might dent your tax refund, or increase your tax bill:

    • Alimony deductions
    • Tax preparation fees
    • Parking and transit reimbursement
    • Reduction of charitable donations if used to acquire college athletic tickets
    • Convenience fees for ATM use

    Rread more about how Trump’s tax plan could save your business 20 percent.

    More on Taxes

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About the Author

Sean Dennison

Sean joined the GOBankingRates team in 2018, bringing with him several years of experience with both military and collegiate writing and editing experience. Sean’s first foray into writing happened when he enlisted in the Marines, with the occupational specialty of combat correspondent. He covered military affairs both in garrison and internationally when he deployed to Afghanistan. After finishing his enlistment, he completed his BA in English at UC Berkeley, eventually moving to Southern California.

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Thanks to the New Tax Law You Can’t Claim These Deductions Anymore
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