Tax Tip of the Week
March 26, 2018:
Last chance to take advantage of deductions that have been modified or repealed due to the recent TCJA.
The recent Tax Cuts and Jobs Act (TCJA) delivers tax breaks to individuals; however, unfortunately, it also repeals or minimizes specific valued deductions that we are also so used to using to our benefit. As a result, this 2017 filing year may be your last chance to claim these five write-offs until further provisions are made:
1. State and local taxes:
You can still deduct the full amount of your property taxes on your 2017 return, in addition to either your sales taxes or state and local income taxes. The new TCJA law effective in 2018 limits the annual deduction for state and local taxes (SALT) to $10,000. This is an unfortunate provision for us living in California, as many of have been accustomed to deducting well over $10,000 in state and local taxes on our previous returns.
2. Mortgage interest:
Currently, you can deduct mortgage interest paid on a qualified residence for acquisition debt of up to $1 million and home equity debt of up to $100,000. The new law reduces the acquisition debt level to $750,000 on new loans and eliminates the deduction for home equity debt after 2017, except if the home equity loan is used to buy, build or substantially improve the taxpayer’s home that secures the loan.
3. Miscellaneous expenses:
On your 2017 return, you can deduct miscellaneous expenses above 2 percent of your adjusted gross income (AGI). This includes unreimbursed employee business expenses and income-production expenses like investment and tax advisory fees. The TCJA eliminates all itemized miscellaneous deductions for 2018 and subsequent years.
4. Casualty and theft losses:
For 2017 returns, you may deduct unreimbursed casualty and theft losses above 10 percent of your AGI, after subtracting $100 per event. The TCJA repeals this deduction, except for losses in federally declared disaster areas, beginning in 2018.
5. Moving expenses:
If you moved in 2017 for job-related reasons, you may be able to deduct your moving expenses (special rules apply). However, this deduction is repealed by the new law beginning in 2018, except for expenses of active duty military personnel.
* Other important tax deductions have been modified or repealed because of the TCJA. Schedule a free strategy session with us to learn how the TCJA affects your situation and how you can best plan for your future.
Please do not hesitate to contact us at 559-226-2209 if you have any questions or concerns about preparing your 2017 tax return. In addition, if you would like to schedule an appointment, either call us or email us at firstname.lastname@example.org. Alternatively, you can schedule an appointment by submitting an online form through our website at www.rooscpa.com/contact-us/.
Hope you find this helpful and we look forward to serving you.
Any financial or tax information contained in this article is taken from a general view and should not be acted upon in your specific circumstances without further details and analysis of the situation or professional assistance from a CPA or tax return preparer.
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