We’ve gone over some items, such as deductions for charity and medical costs, that have been changed in the new Tax Cuts and Jobs Act (TCJA) and won’t be available when filing for the 2018 return. Still, there are additional issues to ponder: The massive tax law passed at the end of last year eliminates certain tax breaks and scales back others.
For example, the TCJA repeals the write-off for miscellaneous expenses on Schedule A, a hodgepodge of deductible expenses that don’t fit neatly into any other category. As with many other new tax provisions for individuals, the deduction is repealed for 2018 and thereafter but then is scheduled to return in 2026.
However, miscellaneous expenses can still be deducted on 2017 returns that must be filed in 2018. This deduction is available only for the excess above 2 percent of your adjusted gross income (AGI).
Suppose your AGI is $100,000, and you incur $1,975 of miscellaneous expenses in 2017. As a result, your deduction is zero, because you don't clear the 2 percent-of-AGI floor. On the other hand, if you’ve incurred $3,000 of miscellaneous expenses, you’re entitled to deduct $1,000 on your 2017 return.
The laundry list of deductible expenses is long and varied but can generally be broken down into two main groups: production-of-income expenses and unreimbursed employee business expenses.
1. Production of income expenses: This category covers the cost of investment, financial and tax services and the like. It includes the following common examples:
To access all of the content on our site, register (it's free!) or login to your existing account.
BONUS: If you register now you can opt to receive a digital copy of "Transform" , Richard Francis' new book for growing firms when it's available on March 30th.
About Ken Berry
Ken Berry, Esq., is a nationally known writer and editor specializing in tax, financial, and legal matters. During his long career, he has served as managing editor of a publisher of content-based marketing tools and vice president of an online continuing education company. As a freelance writer, Ken has authored thousands of articles for a wide variety of newsletters, magazines, and other periodicals.