The new tax law eliminates most itemized deductions, starting in 2018. Under prior law, the following deductions were deductible if they exceeded 2% of your adjusted gross income. For 2018 through 2025, this change eliminates deductions for a wide variety of expenses, such as:
- Tax preparation expenses,
- Tax advice fees, and
- Other fees and expenses incurred in connection with the determination, collection, or refund of any tax.
Expenses Related to Taxable Investments
- Investment advisory fees and expenses,
- Clerical help and office rent for office used to manage investments,
- Expenses for home office used to manage investments,
- Depreciation of computer and electronics used to manage investments,
- Fees to collect interest and dividends,
- Your share of investment expenses passed through to you from partnership, limited liability company or S corporation,
- Safe deposit box rental fee for box used to store investment items and documents, and
- Other investment-related fees and expenses.
Expenses Related to Production of Taxable Income
- Hobby expenses (limited to hobby income),
- IRA trustee/custodian fees if separately billed to you and paid by you as the account owner,
- Loss on liquidation of traditional IRAs or Roth IRAs,
- Bad debt loss for uncollectible loan made to employer to preserve your job, and
- Damages paid to former employer for breach of employment contract.
Unreimbursed Employee Business Expenses
- Education expenses related to your work as an employee,
- Travel expenses related to your work as an employee,
- Passport fees for business trips,
- Professional society dues,
- Professional license fees,
- Subscriptions to professional journals and trade publications,
- Home office used regularly and exclusively in your work as an employee and for the convenience of your employer,
- Depreciation of a computer that your employer requires you to use,
- Tools and supplies used in your work as an employee,
- Union dues and expenses,
- Work clothes and uniforms if required for your work and not suitable for everyday use,
- Legal fees related to your work as an employee, and
- Job search expenses to seek new employment in your current profession or occupation.
The TCJA is almost 500 pages long and covers a wide range of topics. We’ve summarized only the highlights here. For more detailed information, contact us for insight into how the changes will impact your specific business.
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