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




 

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.

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.

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.

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.

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:

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

More on Taxes

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