Expenses you can't write off under this year's tax code

TAXES.JPG

Tax filing starts in just a few weeks and this is the first year for the new tax code to take effect.

It's called the Tax Cuts and Jobs Act and the big debate between accountants right now is whether the laws will help or hurt their clients.

"This tax law change was probably one of the most sweeping changes since the 80's in the Ronald Reagan Tax Act,” Quorum Consulting CPA Mike Armour said.

The law, enacted in 2017, will impact Americans for the first time this year, as they file their 2018 taxes.

Perhaps one of the biggest changes you'll notice this year are in personal deductions and things you can no longer write off.

"Miscellaneous employee expenses, those are eliminated this year,” Armour said. “So in the past, maybe they had some non-reimbursed expenses, like mileage or union dues or some of those kinds of expenses they've been able to deduct as an itemized deduction in the past, are really gone."

Another big area of change is in property tax deductions, which now has a $10,000 limit.

"In the past, if you've had multiple residences or high property taxes or even high state income tax, you're going to be limited to what you can deduct as an itemized deduction there,” Armour said.

"If you look at what the tax reform actually does to working people in this country, you're talking about them no longer being able to claim certain deductions that go to what working people actually do,” Illinois resident Bob Reiter said.

The new code will allow small businesses bigger deductions than in the past, and charities and non-profits will also benefit.

"That's a very good thing, because small businesses have a budget that they have to deal with and that would definitely help them increase their revenue from a different standpoint,” entrepreneur Nathaniel Orr said.

Accountants' biggest advice is to start your taxes early this year and you may want to get professional help due to all the new forms.

Also new this year, you will no longer be able to claim dependents as a deductible. There is a new dependent tax credit that will take its place.

You should be able to start filing your taxes by the end of January, however, accountants said that could be pushed back due to the government shutdown.

close video ad
Unmutetoggle ad audio on off

Trending