Six tax deductions you'll lose on your 2018 return

[bostonangler]

• The Tax Cuts and Jobs Act raised the standard deduction, did away with personal exemptions and curbed a slate of itemized deductions.
• Before the tax overhaul, about 30 percent of taxpayers took itemized deductions, according to the Tax Policy Center.
• The 2017 tax year marked the last time you could file under the old code, so 2018 tax returns will follow the new rules

If you were hoarding receipts in a shoebox with the hope of claiming a big break on your 2018 taxes, prepare to be disappointed.

$12,000 for singles and $24,000 for married joint filers — which will likely result in fewer people taking itemized deductions on their 2018 returns.

 

"The standard deduction is so high," said Cari Weston, CPA and director of tax practice and ethics at the CPA institute. "You might not itemize in the future if you were itemizing before."

Here are six itemized deductions that are capped or gone altogether from your 2018 return.

Casualty and theft losses

 

Jose A. Teijeiro | Getty Images

Winter is especially dangerous when it comes to house fires. Half of all home heating fires take place in December, January and February, according to the National Fire Protection Association.

Under the old tax code, you were able to claim an itemized deduction for property losses that aren't reimbursed by insurance and that occur unexpectedly. This would include damage from fire, accidents, theft and vandalism, as well as natural disasters.

You were able to deduct the losses to the extent they exceed 10 percent of your adjusted gross income.

Now, you can only claim personal casualty losses if the damage is attributable to a disaster declared by the president. This change is in effect from 2018 through the end of 2025. The 10 percent threshold of AGI still applies.

In 2016, the most recent year available, 154,274 tax returns claimed a casualty or theft loss deduction, according to the IRS.

State and local taxes

 

Roberto Machado Noa | Getty Images

If you reside in New York, New Jersey or California, odds are you're feeling the squeeze from property tax, real estate taxes, and state and local income levies.

Meanwhile, 45 states and the District of Columbia levy statewide sales taxes — and municipalities in 38 states add on a layer of local sales taxes, too, according to the Tax Foundation.

Before the tax overhaul, you were able to nab an itemized deduction — known as the state and local tax deduction or SALT — for these levies.

 

Created with Highmaps 6.2.0SALT in the woundThe $10,000 cap on state and local taxes are a blow tojust a handful of states. Hover for details.AKALARAZCACOCTDCDEFLGAHIIAIDILINKSKYLAMAMDMEMIMNMOMSMTNCNDNENHNJNMNVNYOHOKORPARISCSDTNTXUTVAVTWAWIWVWYGraphic by Nick Wells | Source: IRS via the Tax Policy Center

Washington

---

Percent of returns with deduction: 2.3%
Average amount claimed: $7,403
Percent of federal income taxes paid: 2.6%
Deduction as share of state AGI: 2.9%

Kiss those breaksgoodbye — at least to a certain extent. The new tax code places a $10,000 cap on SALT deductions, which could dent returns for people living in high-tax areas.

In 2015, the average SALT deduction for New Yorkers who claimed the tax break was more than $22,000, according to the Tax Policy Center.

Medical and dental expenses

 

Photo By BSIP/UIG via Getty Images

The tax overhaul temporarily lowered the threshold for the medical expense deduction.

For the 2017 and 2018 tax years, you're able to claim an itemized deduction for out-of-pocket health-care costs to the extent they exceed 7.5 percent of your adjusted gross income.

Starting in 2019, that threshold will leap back up to 10 percent — where it had previously been for most taxpayers.

Bear in mind that while the IRS has lowered the bar for the amount of medical expenses you must incur in 2018, fewer people all around are likely to itemize their deductions due to the higher standard deduction.

As a result, this break may no longer be available to you.

Tax prep fees and more

 

Getty Images | Andersen Ross

If you hoard receipts, you're probably familiar with the grab bag of tax breaks, known as the miscellaneous itemized deductions.

Back in 2017, before the tax overhaul, you were able to deduct unreimbursed employee costs, tax preparation fees, investment expenses and more — as long as they exceeded 2 percent of your adjusted gross income.

Under the new tax code, these breaks are out of the picture as of 2018.

Home mortgage interest

 

jacoblund | Getty Images

Prior to the Tax Cuts and Jobs Act, you were able to write off the interest for up to $1 million in mortgage debt. If you took out a home equity loan or line of credit, you were also able to deduct the interest paid on loans of up to $100,000.

Now you can only claim a deduction for interest on up to $750,000 in qualified residence loans — that is, the combined amount of loans you use to buy, build or substantially improve your dwelling and second home.

The IRS has also applied new restrictions to interest claimed for home equity loans and lines of credit: You can only take the break if you were using the money to build or improve your home.

The deduction is off the table if you took a HELOC to use for personal expenses.

Charitable giving

 

Camille Tokerud | Getty Images

The IRS continues to reward taxpayers with philanthropic inclinations — as long as they give generously.

The charitable donation deduction is still on the table, even after the tax overhaul. The only difference now is how many people will be able to claim it.

A combination of higher standard deductions and limitations on itemized deductions means that fewer people will be itemizing on their 2018 returns.

In turn, that could put the charitable deduction out of reach for those taxpayers.

If you fall just short of the new standard deduction of $12,000 (single) or $24,000 (married and filing jointly), you might be able to itemize in 2018 if you "bunch" multiple years of charitable donations and get over the hurdle.

https://www.cnbc.com/2018/11/21/six-tax-deductions-youll-lose-on-your-2018-return.html?__source=yahoo|finance|headline|story|&par=yahoo&yptr=yahoo

[bigwave]

8 hours ago, bostonangler said:

Casualty and theft losses

cleans up a lot of fraud claims.

 

8 hours ago, bostonangler said:

State and local taxes

I say thank you to all of the states that have subsidize me all those years. No sense  in folks is TX or FL to pay my way.

 

8 hours ago, bostonangler said:

Medical and dental expenses

A little insurance goes a long way. Instead of insurance one could get a Health share program like Liberty Health share.

 

8 hours ago, bostonangler said:

Home mortgage interest

$750K is still pretty good.

 

8 hours ago, bostonangler said:

Charitable giving

Give to get - we receive through the same window we give through.

 

Thank you for your help,

 

Come on RV

 

BW

 

 

[bostonangler]

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

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.

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:

• 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
• https://www.yahoo.com/finance/news/thanks-tax-law-t-claim-183102225.html

 

B/A

[md11fr8dawg]

Thanks BA

 

[jg1]

Does it really matter when your comming out ahead? No.  Kind alike prez. Trump. Hes went bankrupt before but he has more money than you and I, so he came out ahead too. Lol

Edited December 1, 2018 by jg1

[Markinsa]

On 11/23/2018 at 5:54 PM, bigwave said:

 

On 11/23/2018 at 9:23 AM, bostonangler said:

Home mortgage interest

$750K is still pretty good.

 

Yeah, I'm really peeved that I am only limited to $750K in interest deductions...

 

.

[bostonangler]

Apparently some people do not itemize...

 

B/A

[md11fr8dawg]

I do and so it will be interesting how much more or less I will pay due to these tax changes