TAS Tax Tip: Deduction and Expense Changes; Gear-up now for changes that will affect your 2018 return
It’s the holidays and is anyone really thinking about taxes? We hope you are, because there are certain things you will want to know now, and some you may need to act upon before the end of the calendar year.
For individuals, the Taxpayer Advocate Service’s Tax Reform Changes website, in both English and Spanish, has information for you about what is changing and what is not for the 2018 tax year in an easy to understand format by topic and line-by-line using the 2017 Form 1040.
But before you go to this website, we would like to highlight just a few changes in the law involving some of the more common deductions and expenses, particularly for those taxpayers who normally itemize using a Schedule A.
Changing Deductions and Expenses
Here’s the short list of items related to families:
- Standard Deduction
- Mortgage Interest
- Taxes You Paid (Including State and Local, Income, Real Estate, and Personal Property Taxes)
- Miscellaneous expenses (unreimbursed employee business expenses, tax return preparation fees, and other miscellaneous fees)
- Medical and Dental Expenses
- Charitable Contributions
Items that Require Action Now
First, you should check your 2017 itemized deductions to make sure you understand what the tax reform changes could mean for your tax situation in 2018. Tax reform nearly doubled the standard deduction amount for all filing statuses so you may find the increased standard deduction more than your total itemized deductions from last year. Therefore, you may want to opt for choosing the standard deduction rather than itemizing. If so, this may mean not as much recordkeeping may be necessary.
Of course, you may still wish to itemize. Itemized deductions are no longer limited if your adjusted gross income (AGI) is over a certain amount. You may want to review the changing amounts allowed on Schedule A, such as the increased Charitable deduction allowance for contributions of cash, and take action before the end of this year.
More Help and Information
The Taxpayer Advocate Service wants to help you understand all the items that are changing and ones that are not, so please visit our website and take a few moments to look through the information listed there and find the tax items relevant for you and your family. We don’t want you to miss out on any tax-related items that have changed this year because you were unaware of them.