8 Tax Deduction Changes in 2018

1. Standard Deduction of $6,350

The standard deduction will increase to $12,000 for single filers; $24,000 for married filers and $18,000 for head of household filers.

2. Personal Exemption of $4,050

This will be eliminated due to the increase of the standard deduction.

3. Increase in state & local taxes

The new cap on this itemized deduction will be $10,000. Examples include sales tax, real estate taxes and personal property taxes.

4. Mortgage interest deduction

Currently, this cap is at $1,000,000 (most beneficial those living in NY or CA) and will now be reduced to $750,000. Additionally, home equity loans now can only be deducted if related to a home improvement.

5. Unreimbursed business expense

This itemized deduction is going away completely for the 2018 tax year. Most employees who pay out of pocket for their expenses (such as telecommuters) will now not be entitled to the 2% deduction moving forward.

6. Miscellaneous itemized deductions

Another itemized deduction that has been cut is the miscellaneous 2% deductions such as: prior year tax prep fees, investment fees, professional dues, etc.

7. Moving Expenses

Also on the chopping block was the deduction for moving expenses. In prior years, moving over 50 miles for a job was deductible (travel, lodging, etc.) but not in 2018. The exclusion to this is the armed forces.

8. Alimony Deduction

Unfortunately, this will affect high income earners the most as it was previously an uncapped above the line adjustment. In 2018, this deduction is also being removed and alimony paid to an ex-spouse will no longer be deductible. The deduction is being eliminated for any divorce commencing after Dec. 31, 2018.

Follow us for more content!

Facebook/Instagram: @taxestampa

©2018 Taxes Tampa LLC™ All Rights Reserved.



stephanie@taxestampa.com   |   Tampa, FL 33606

  • Facebook Basic Black
  • Twitter Basic Black
  • Black Instagram Icon