Six tax deductions you'll lose on your 2018 return

[mfcorey1]

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

That's because the Tax Cuts and Jobs Act placed steep limits on itemized deductions, including lesser-known breaks for the fees you pay your tax preparer and unreimbursed employee business expenses.

The new tax law also eliminated personal exemptions and nearly doubled the standard deduction to about $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.

https://www.msn.com/en-us/money/taxes/six-tax-deductions-youll-lose-on-your-2018-return/ar-BBPXsbb?li=BBnb7Kz&ocid=mailsignout

[JustAnotherGen]

1. SALT Cap

We need this eliminated - immediately

. . . 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.

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

This is why the NJ Delegation looks the way it does. Forget climate change, kidnapped children and American Nazis. It's about how we fund out schools, how very little NJ gets back from Fed Gov compared to how much we put in.

Federal Grants/Aid is nominal to the state. McConnell, Ryan and Trump - what they did to us was vindictive and cruel.
https://www.njsba.org/news-information/parent-connections/school-finance-101/

[modrepub]

12. High Local Taxes

I’ve been wondering lately if one of the reasons some states have high local taxes is because of how little they get back at the federal/state level. I’d love to know the answer to this question. A breakdown of each state/county tax payments and returns would be enlightening. Would love a guaranteed return on taxes that would limit how much could exit via taxes. If Mitch wants to cut entitlements then the states and counties on “the take” should be first in line for cuts. In my mind figuring out who pays and who takes is easy enough to do

[roamer65]

31. We need a Transfer Payment Equalization Act.

A simple law that says no state can receive from the federal government any more than they pay in to it in taxes.

[TheBlackAdder]

20. Yep, and if a single parent with 4 kids just over the caps, you get half the deductions of a SINK.

.

Married Single income No Kids, or Dual Income No Kids.

.

[JustABozoOnThisBus]

2. If you are 70.5 years old or more with an IRA, google "Qualified Charitable Distribution"

You can make charitable donations as directed distributions from your IRA and avoid the tax on them.

Happy Thanksgiving, and keep giving.

[watoos]

3. Without itemizing?

Pa. doesn't tax investment income, shh.

[JustABozoOnThisBus]

24. That's good of PA. Our IRS, on the other hand, has its hand out.

And, correct, without itemizing. Your IRA's investment house handles the magic.

[llmart]

4. That's just great for those who don't need their distributions to live on.

But most of the seniors I know who are taking distributions can't afford to do that.

[JustABozoOnThisBus]

25. If you and the other seniors give to charities or to church, you can't afford not to.

It's better to give 100 and not pay tax on it, rather than giving 100 and THEN paying tax on it.

If you don't give to church or charity, then this doesn't apply.

[llmart]

28. I'm not a churchgoer...

and I've given much to charity over my adulthood including hours and hours of volunteer time. However, now that I'm retired and living on a fixed income, other than volunteering, I don't have the means to give money any longer. Also, I thought the article said that it would only apply to large dollar amounts? The clip is info on how the donations must be handled. It has more to do with being able to itemize than it does anything else.

"Bunching charitable gifts allows donors to cram two or more years' worth of donations into a single tax year in order to get over the standard deduction threshold and qualify to itemize on their 2018 tax returns."

[JustABozoOnThisBus]

29. No, this is different than deducting charitable donations.

This gives directly from the IRA, you never touch the money, it doesn't show up as income. Of course, this means you don't itemize the donation, that would be "double-dipping". And, it can be small amounts - there's no threshold that you need to exceed to get the benefit. The article didn't mention "Qualified Charitable Distribution", probably because it only applies to us old people (over 70.5 yrs) with IRAs.

Giving every other year might be a good tactic for younger donors. The same tactic worked for "winter" property taxes, alternately pay in January or December to get two hits in the same year.

[Laura PourMeADrink]

5. Ha. Thought you meant charitable donation to yourself. Nt

[JustABozoOnThisBus]

26. I'm not a 501(3)(c) charity ... yet. :)

There is another mechanism involving some sort of personal charitable trust, but I haven't looked into it, and the investment person couldn't explain it in a way I could understand, so I will ignore it for now.

I am not a Trump, I have no "charitable" foundation with my name on it, no way to hide my "billions".

But maybe you have an idea ...

[Vinca]

6. This article made me feel better. We do itemize because we have 2 small businesses and

I can only see one minor deduction we'll be losing and it's offset by the higher standard deduction.

[Omaha Steve]

7. Thanks for posting

K&R!

[Igel]

10. Some pay. Some pay less.

Never had enough mortgage deductions to make itemizing make sense. Housing prices aren't unreasonable, so the mortgage isn't high.

Got no state income tax. Don't give a lot of money to charity of any stripe.

Things like tax prep fees ... When it's not a large amount, to dig down to that ... ?

I could see health or loss deductions being a problem, but not on a continuing basis. Health insurance caps most expenses at a fairly reasonable amount (and I have my employer's high deductible policy).

[IronLionZion]

8. As usual, the wealthy benefit from the tax cuts while the rest of us

get screwed out of deductions. Some folks will pay more than before.

[llmart]

9. Also, the corporations got a huge tax cut.

If you read the entire article, it sounds like the wealthy, the corporations, people who have offshore accounts, are all the ones who benefited greatly. They even mention how Trump benefits. So some middle class people will get a modest cut, but once again the inequality grows.

[watoos]

11. You are so correct,

It won't just be people who lost itemized deductions, it will be also be Trumpers who filed 1040 EZ returns.
Yeah the Standard Deduction is doubled but that will be offset by the elimination of exemptions.

[MichMan]

13. Haven't itemized in at least 10 years

[beachbum bob]

14. gonna surprise many tax filiers they will have to PAY......after being told of all the great benefit

of trump's taxcuts

[nitpicker]

30. Check what's being withheld from your income

A lot of places altered their withholdings and thus underestimated the tax that needed to be withheld.

On top of that, it didn't leave cushions for bits of extra income, some retirement distributions, etc.

Go to https://apps.irs.gov/app/picklist/list/draftTaxForms.html

and click on Inst 1040 Tax Tables for the draft tables.

[MichMan]

33. The amount withheld has noting to do with how much you owe.

Always laughed at those idiots that were so happy they were getting a big refund without recognizing it was just their own money anyway.

[PoindexterOglethorpe]

15. I benefit from the higher deduction.

So now I'm not paying any state or federal income tax.

Of course, my income isn't terribly high, but still.

[milestogo]

16. This would have been the first year for which I would have itemized

due to medical expenses... but its under $12000.

[oberliner]

17. That is a pretty high standard deduction though

[sinkingfeeling]

18. Don't we also lose the personal exemption?

[borgesian]

19. Yes, and dependents too.

[MichMan]

22. Won't many lower income folks who don't have much to itemize come out ahead?

[karynnj]

23. One of the reasons they lost so many CA and NJ house seats. Nt

[shanti]

27. Does this change include

mortgage credit certificates? I don't itemize, but I have always claimed this credit since purchasing (and refinancing) my house. I've only seen that the SALT deduction is gone, but a credit is different?

[airplaneman]

32. Some not mentioned items here people.

Last edited Fri Nov 23, 2018, 12:13 AM - Edit history (1)

Take a couple over 65 who don't itemize already which is probably most of us 99%-ers in this category. The standard deduction goes from $12,700 to $24,000 that's $11,300 not $12,000.
You loose the standard deduction 2 x $4,050.00 and the over 65 deduction 2 x $1,250.00 and this is $10,600 versus $11,300 or $700. And if you think you are going to save $700 I have identified about $4K in additional lost benefits for my personal situation so I pay taxes on $3,300 more than before the "CUT". It gets worse in 2026 the $24,000 goes back to $12,700 and you don't get back any of the deductions you lost. This needs to change along with a lot of other things.
-Airplane