If you are a taxpayer, you should be concerned about the fact that under tax reform, the deductions that you have counted on to minimize your taxable income is not available or it has disappeared this year, 2018. Read below to learn what the tax deductions are that have disappeared this year.
1. Moving expenses:
Before tax reform (the tax years before 1st January 2018), taxpayers had the opportunity to deduct the expenses related to moving for the job or for other purposes that met certain IRS criteria. But, from the tax years starting in 2018 and ending in 2025, you will no longer be able to get the deductibles, unless you are one of the Armed Forces members and you have to move because of military order.
2. Tax preparation fees:
This year, you are also not eligible for getting the deductions for tax preparation fees that fall under miscellaneous fees on Schedule A(Form 1040) if it exceeds 2%. The tax preparation fees include the payments to CPA Santa Monica, tax preparation firm, payments to accountants and the cost of tax preparation software.
3. Unreimbursed job expenses:
For the tax years 2018 to 2025, you will not get deductible on Schedule A (Form 1040), if your miscellaneous unreimbursed exceeds 2% of AGI (adjusted gross income). Unreimbursed job-related expenses include continuing education, union dues, regulatory and license fees, employer-required medical tests and out-of-pocket expenses that are paid by an employee for tools, uniform and supplies.
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4. Transit Reimbursements and subsidized parking for employers:
Prior to tax reform (before 2018), the employees used to get the advantage of a perk in which transit pass and parking costs, up to $255, were reimbursed by their employers. These reimbursements were not included in the taxable income of the employees and they used to get deductibles on their tax returns. However, under this tax reform, you will not get the employer deduction anymore.
5. Personal Exemptions:
Prior to the tax reform, the personal exemption allowed the taxpayers to minimize their taxable income. The standard deduction was $12,000 for individuals, $24,000 for married and $18,000 for heads of a family. However, this year, some taxpayers might lose the deductions.
For any query about tax reform or to hire a CPA Santa Monica to stay upgraded with the latest tax reform, don’t hesitate to give us a call.