SIX TAX DEDUCTIONS YOU WILL LOSE IN 2019
Six tax deductions you will lose in 2019. If you were hoarding receipts in a shoe box in the hope of claiming a big break on your 2018 taxes, prepare to be disappointed. That’s because the Tax Cuts and Jobs Act placed steep limits on itemized deductions, including lesser known breaks for the fees you pay your tax preparer and unreimbursed employee business expenses. The new tax law also eliminated personal exemptions and nearly doubled the standard deduction to about $12,000 for singles and $24,000 for married joint filers–which will likely result in fewer people taking itemized deductions on their 2018 tax returns. “The standard deduction is so high”, said Carl Weston, CPA and director of tax practice and ethics at the CPA institute. “You might not itemize in the future if you were itemizing before.
Six tax deductions you will lose in 2019. 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.
State and Local taxes. If you reside in New York, New Jersey, or California, odds are you’re feeling the squeeze from property taxes and state and local income levies. Prior to the overhaul, you were able to nab an itemized deduction, known as the state and local tax deduction. Kiss those tax breaks goodbye–at least to a certain extent. The new tax law places a $10,000 cap on all deductions. If you owe taxes due to this you can always consult a Tax Resolution firm and ask about the IRS Fresh Start Program. Tax Relief is available in the IRS Revenue Code.
Medical and dental expenses will increase the cap of adjusted gross income form 7.5% to 10% for these deductions. Home mortgage interest. Now you can only claim a deduction for interest up to a $750,000 residence loan. That is, the combined amount of loans you use to buy, build or substantially improve your dwelling and second home.