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-Related Expenses

• 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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