We know that the changes to the tax law can be confusing and a little bit like latin – difficult to pronounce and who even speaks that anymore anyway??
We do – that’s who! And proud of it. So we are here to help.
If you have decided to itemize your deductions for the 2018 tax year, there are some changes that have been made that we (and the IRS) want you to be aware of.
Here are some ways itemized tax deductions have been affected with the changes due to the Tax Cuts and Job Act:
Interest on Home Equity Loans –
If you currently own a home and have a home equity loan, you can no longer deduct interest paid on that loan. There is an exception however – you can continue to deduct the interest IF you are using the proceeds to buy, build, or improve your current home substantially.
Medical/Dental Expenses –
While going to the dentist is NOT FUN – did you know that you can deduct the part of your medical and dental expenses that’s more than 7.5% of your gross income? Well, according to the adjusted law and the IRS themselves, you can.
State/Local Taxes –
If you are single (or married but filing singly) – the total deduction limit of state and local income, sales, and property taxes combined is $5,000. For married couples, the total limit is $10,000.
Other Deductions –
Any deductions for job-related expenses or other misc. itemized deductions that exceed 2% of gross income has been suspended by the new law. (This ALSO includes unreimbursed employees expenses, such as deduction for business-related meals and entertainment.)
And that’s your latin lesson for the day, folks!
Facts obtained from IRS.gov