RICHMOND, VA (WWBT) - Come January, we’ll all be trying to figure out the changes to the way we file our taxes because of the Tax Cuts and Jobs Act of 2017. So, with the help of a Richmond area financial adviser, we take a look at some of the biggest deductions we are losing next year.
The new tax law is more than 500 pages long, so there’s a lot of deductions you used to be able to claim that are going away.
Home Office Use Deduction:
- If you are an employee of a company and you work from home, you can no longer deduct any home office expenses. From 2018 to 2025 this deduction is suspended. If you’re self-employed, you’re not affected.
Moving Expense Deductions:
- If you made a job related move of 50 miles or more, you were able to deduct those expenses. That deduction has been eliminated except for armed forces service members.
Job Search Expenses:
- Looking for a job? Being able to deduct expenses for things like a premium LinkedIn account or a college class to help you get into a new job, that deduction is gone.
Tax Preparation Fees:
- These can no longer be claimed. Meaning, you can no longer deduct payments to CPA’s Tax preparation firms and tax software companies.
Unreimbursed Travel and Mileage:
- Prior to 2018, if you were an employee and had travel expenses that were unreimbursed, you could deduct them once your total miscellaneous deductions exceed 2 percent of adjusted gross income. That is gone now.
- Although not in effect for the 2018 tax year, but for all divorces executed after Dec. 31, 2018, alimony paid will no longer be tax deductible. On the other side of that change, the former spouse receiving the alimony won’t have to include that in their taxable income.
Casualty, Theft and Disaster Losses:
- If a major storm hits, previously you could deduct losses that were not covered by insurance or some other relief program. Starting in January you can only make that deduction if the President designates where you live as a disaster area.
Home Equity Loan Interest:
- Most discussion has been around home mortgage interest deduction that fell to $750,000 for loan’s taken out starting Dec. 15, 2017. However, the deduction for home equity loan interest is entirely gone except if it was done for home improvement and still subject to the total $750,000. If the home equity loan was used for personal expenses such as debt consolidation - there is no deductions and no grandfathering either.
Investment Fees and Expenses:
- This is a deduction that has been repealed along with the deduction for safe deposit box fees and investment newsletters.
Donations to College Athletic Departments:
- Any contributions to a college athletic department that are directly related to tickets or seating rights to any athletic events are no longer deductible. So, if a school requires you to donate a certain level in order to get season tickets or tickets in general, that school will have to rethink this strategy.
Richmond area Financial Planner, Thomas Block, said there’s bound to be a change or two that will affect your family.
“Reach out to somebody get a referral and say here’s my tax situation from last year. I don’t expect any changes this year, so what type of exemption and deductions did I lose because of this tax law change?” said Block.