Four tax deductions you'll lose on your 2018 return
The Tax Cuts and Jobs Act raised the standard deduction, did away with personal exemptions and curbed a slate of itemized deductions.
Before the tax overhaul, about 30 percent of taxpayers took itemized deductions, according to the Tax Policy Center.
The 2017 tax year marked the last time you could file under the old code, so 2018 tax returns will follow the new rules.
If you were hoarding receipts in a shoebox with the hope of claiming a big break on your 2018 taxes, prepare to be disappointed.
Here are four itemized deductions that are capped or gone altogether from your 2018 return.
Casualty and theft losses
Winter is especially dangerous when it comes to house fires. Half of all home heating fires take place in December, January and February, according to the National Fire Protection Association.
Under the old tax code, you were able to claim an itemized deduction for property losses that aren't reimbursed by insurance and that occur unexpectedly. This would include damage from fire, accidents, theft and vandalism, as well as natural disasters.
Now, you can only claim personal casualty losses if the damage is attributable to a disaster declared by the president. This change is in effect from 2018 through the end of 2025. The 10 percent threshold of AGI still applies.
2. State and Local Income Tax
If you 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.
3. Medical and Dental Expenses
The tax overhaul temporarily lowered the threshold for the medical expense deduction.
For the 2017 and 2018 tax years, you're able to claim an itemized deduction for out-of-pocket health-care costs to the extent they exceed 7.5 percent of your adjusted gross income.
Starting in 2019, that threshold will leap back up to 10 percent — where it had previously been for most taxpayers.
4. Tax prep fees and more
If you hoard receipts, you're probably familiar with the grab bag of tax breaks, known as the miscellaneous itemized deductions.
Back in 2017, before the tax overhaul, you were able to deduct unreimbursed employee costs, tax preparation fees, investment expenses and more — as long as they exceeded 2 percent of your adjusted gross income.
Under the new tax code, these breaks are out of the picture as of 2018.
Posted on November 21, 2018