7 Tax Deductions You Can No Longer Claim on Your Tax Return
Introduction
The Tax Cuts and Jobs Act of 2017 (TCJA) introduced several changes to tax laws, significantly impacting the deductions taxpayers could claim starting with the 2018 tax year. Here are seven tax deductions that were eliminated or reduced under the new law.
1. Bicycle Commuter Benefit
Previously, employers could give employees who commuted by bicycle up to $20 a month in tax-free reimbursements for bike-related expenses. This benefit has been phased out until 2026.
Image Description: Infographic showing the bicycle commuter benefit that has been phased out.
2. Mortgage Interest Deduction on Over $750,000 in Home Loans
The TCJA reduced the cap on the mortgage interest deduction from $1 million to $750,000 for new loans taken out after December 15, 2017. Existing loans are grandfathered under the old limit.
Image Description: Infographic showing the changes to the mortgage interest deduction.
3. Home Equity Loan Interest
Previously, interest paid on home equity loans or lines of credit was deductible. Now, this interest is only deductible if the loan is used to buy, build, or substantially improve the home that secures the loan.
Image Description: Illustration explaining the limited deduction for home equity loan interest under the TCJA.
4. Moving Expenses
Before the TCJA, moving expenses could be deducted if you met specific conditions. This deduction is now only available to active-duty military members moving due to a military order.
Image Description: Infographic showing the elimination of the moving expenses deduction for most taxpayers.
5. Personal Casualty and Theft Losses
Losses to personal property due to casualty or theft were previously deductible if they exceeded $100. Under the TCJA, you can only deduct these losses if they occur in a federally declared disaster area.
Image Description: Infographic explaining the new limitations on personal casualty and theft loss deductions.
6. SALT Deductions Over $10,000
The State and Local Tax (SALT) deduction, which includes state and local income, sales, and property taxes, is now capped at $10,000. This significantly impacts taxpayers in high-tax states.
Image Description: Infographic showing the new cap on SALT deductions.
7. Miscellaneous Itemized Deductions
Miscellaneous itemized deductions, which could be claimed if they exceeded 2% of a taxpayer’s adjusted gross income, are no longer deductible. This includes deductions for tax preparation fees, investment fees, and unreimbursed work-related expenses.
Image Description: Infographic showing the elimination of miscellaneous itemized deductions.