Here are a few tax deductions that will disappear in the New Year!
Prior to 2018, individuals were able to claim an exemption equivalent to $4,050 per person. This exemption included amounts for individuals, dependents and also spouses included on the tax return. However, this will no longer be the case. Beginning in 2018, individuals will no longer be able to take a personal or dependency exemption.
Casualty and theft losses
Prior to 2018, individuals were able to take a casualty and theft deduction for losses. For instance, if a person lost property due to a flood or if their property was vandalized, they were able to take this as a loss. This was the case if the property was not covered by insurance partially or in whole. However, with the new tax law, a taxpayer will only be able to take the loss if it is a presidential declared disaster.
Alimony is no longer deductible after December 31, 2018. This means that divorces that occur after December 31st and require alimony payments, spouses will no longer be able to take a deduction on the tax return. On the other side, those who are receiving the income, will not be required to claim it as taxable income. Keep in mind, those who are paying alimony payments now will not be impacted.
Individuals who incur expenses as it relates to moving will no longer be able to take this as a deduction. The new law only allows for deductions for those who are in the military and are active personnel.
Keep in mind, many deductions are now capped to a certain limit. State and local taxes, also known as SALT deductions are now capped up to $10,000 per tax year. In addition, individuals who take out a mortgage on their homes – can only take a deduction for interest up to $750,000 of the home loan. And finally, home equity loans are no longer deductible unless it is used for home improvement.
If you want to get an idea of what your tax liability may be for the new year, consider finding an online tax calculator to determine your estimate. You can check out sites such as
Kemberley Washington is a certified public accountant and owner of Washington CPA Services, LLC. She is the author of several bestselling books, including The Ten Commandments to a Financial Healing, 21 Days of Powerful Breakthroughs and many other great books. She frequently appears on many news media outlets and writes a blog at Kemberley.com.