This week we will take a look at some other parts of the Tax Cuts and Jobs Act that was passed in December.
Medical Expenses — Under the new law, for 2017 and 2018, medical expenses are deductible to the extent they exceed 7.5% of adjusted gross income (AGI) for all taxpayers. Previously, the AGI “floor” was 10% for most taxpayers.
State and Local Taxes — The itemized deduction for state and local income and property taxes (including personal property and sales tax) is limited to a total of $10,000 starting in 2018.
Miscellaneous Itemized Deductions — Starting in 2018, there is no longer a deduction for miscellaneous itemized deductions which were formerly deductible to the extent they exceeded 2% of the taxpayer's AGI. This category included items such as investment expenses, union dues, and unreimbursed employee expenses (including home office expenses for employees).
Standard Deduction — The new law increases the standard deduction to $24,000 for joint filers, $18,000 for heads of household, and $12,000 for singles and married taxpayers filing separately. These figures will be indexed for inflation after 2018.
Disclaimer: The items included in the Tax Tip Tuesday Video Blog are informational only and are not meant as tax advice. Consult with your tax advisor to determine how any item applies to your situation. IRS Circular 230 disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal tax advise contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein