In its efforts to simplify the tax code, Congress included provisions in The Tax Cuts and Jobs Act of 2017 that increased the standard deduction to $12,000 for individuals ($24,000 for married couples) and either modified or eliminated many itemized deductions. As a result, taxpayers and their professional tax advisors are currently exploring ways to best take advantage of the itemized tax deductions still available to them.
In the next three posts, we are going to describe some deductions that:
- have been eliminated (until at least 2026),
- are now limited to either certain types of taxpayers or to specific circumstances, and
- that we can all for the most part still use.
Let’s start with a brief review of some deductions that are no longer available to anyone:
Unreimbursed employee expenses
In the past, employees could deduct job-related expenses such as continuing education costs, medical tests required for work, business mileage, conferences, travel, lodging, meals, tools and other work supplies, uniforms and other protective clothing, trade magazine subscriptions, home office space, union dues, regulatory and license fees, and other work-related expenses that were not reimbursed by their employers. The new tax law eliminated these deductions (except for a deduction of up to $250 for teachers who pay out-of-pocket for school supplies), so consider asking your employer to cover your unreimbursed employee expenses or to find another way to offset these costs.
Subsidized parking and transit reimbursement
Corporations used to get a deduction of up to $255 per month per employee for employee parking and transit passes. This deduction has been eliminated, and we anticipate that many employers will cease offering this benefit to their employees as a result.
Expenses connected with a job search
Job hunting expenses are no longer deductible. You used to be able to deduct the cost of classes you took to advance your career or to further develop your professional skills and knowledge, employment agency fees, and other costs associated with your job search. You can’t do that anymore.
Tax preparation fees
No more deductions for amounts paid to your tax preparer, CPA or for tax software.
Donations to colleges in exchange for athletic event seats
If you donate money to a tax-exempt college or university, you now have to reduce the amount of your charitable contribution by the value of any sports event tickets you receive in return. The balance is still deductible.
Other miscellaneous deductions
Other deductions we lost in 2018 include: expenses for hobbies that generate income, convenience fees charged by companies that facilitate payment of federal taxes via credit and debit cards, and investment fees and expenses.
Personal exemptions: another loss for many taxpayers
The personal exemption – which was $4,050 per person last year – has also been eliminated. For many but not all taxpayers, the increase in the standard deduction should make up for the loss.
In our next post, we are going to describe some deductions that have been eliminated for most taxpayers, but that may still be available to you if you qualify.