How 2018 tax reform changed deduction? In short, the standard deduction has increased, but that only means fewer can claim the itemized deduction. This reform limits those who itemized and benefit those who do not. Depending on your income bracket, you may have lower tax liability this year than the last.
KEY TAKEAWAYS
The Tax Cuts and Jobs Act reduced and did away with a number of deductions and credits while keeping in place, and increasing the limits in some cases, for a number of others—with the changes set to expire on Dec. 31, 2025.
Personal and dependent exemptions are now obsolete, going away completely.
The standard deduction, however, nearly doubled for those filing single or married.
Other notable deductions going away include moving expenses and alimony, while limits are being placed on deductions for mortgage interest, along with state and local taxes.
Key expenses that are no longer deductible include those related to investing, tax preparation, and hobbies, while gambling expenses remain deductible and the threshold for charitable deductions rises.
Whether deductions eliminated by the TCJA or other changes have a negative impact on you depends on your personal financial situation and the types and amounts of deductions you might be able to take. It's worth noting that the changes implemented by this legislation are currently set to expire after Dec. 31, 2025, unless Congress decides to extend them.
CCL Tax & Accounting Services
Sourced by: Investopedia