9 tax deductions individuals can no longer claim for their 2018 taxes

By Ray Martin

/ MoneyWatch

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The Tax Cuts and Jobs Act gave taxpayers lower tax rates on more of their income, nearly doubled the standard deduction, and provided higher tax credits for families with children. But while the new tax law gave breaks to many, it also took away from others.

To pay for the tax breaks, the tax law erased many deductions that millions of taxpayers claim every year. These popular deductions will no longer be allowed starting in the 2018 tax year, whose filing season starts Jan. 28, 2019. The deductions will remain out of action through 2025, unless Congress acts to make the tax law permanent.

Personal Exemptions

Last year, everyone could claim this deduction, which was $4,050 for yourself and each family member listed on your tax return. So, if you are single, you could claim one exemption, and if married with two children, you would have claimed four personal exemptions.

Lawmakers say that the doubling of the standard deduction effectively replaced this exemption – but that's not exactly true.

But families may still make come out ahead, given that some taxpayers lost deductions if their income exceeded certain thresholds. Starting in 2018, the phase-out for the personal exemption and standard deduction for married couples with adjusted gross income above $313,800 (and singles above $261,500) has been repealed. Also, families will receive higher child tax credits in 2018, so those tax credits may offset the impact of the loss of personal exemptions for families.

Home equity loan interest

The new tax law generally limits the deductibility of mortgage interest on up to $750,000 of debt used to acquire a home. The new rules also disallow deducting the interest on home equity loans used in many common transactions.

For example, if you take out a home equity loan on your home and used the proceeds for other purposes, such as college tuition or to pay off credit card debt, then you can't treat the interest on that home equity loan as deductible qualified residence interest. If instead you took out a home equity loan and used the proceeds to improve your existing home, then the interest would be deductible — but only if the loan, when combined with your current mortgage, does not exceed the $750,000 total loan limits under the new rules.

Many homeowners with existing mortgages and home equity loans will be unaffected because the prior-law-rules are still in place for them.

Moving expenses

If you met specific IRS criteria, and you have expenses relating to a move due to a change in your job or business location, your moving expenses would have been deductible in 2017. In 2015, the last year where data is available, approximately 1.1 million taxpayers claimed this deduction, which saved them about $3.7 billion.

The tax law that starts in the 2018 tax year eliminates this deduction, which in the past could be claimed even if you didn't itemize your other deductions. Some folks are exempt from this change, such as members of the military on active duty.

Job expenses

The deductions you've claimed for costs for things related to your job – such as license fees, required medical tests, clothing, tools and equipment and unreimbursed continuing education – are no longer allowed. The deduction for these costs was only allowed to the extent that these costs, when combined with your other miscellaneous deductions exceeded 2 percent of your AGI.

Because your employer can still deduct these costs, consider asking them to help towards these expenses.

Tax preparation fees

Like job expenses, the costs you've paid to your tax preparer, when combined with other miscellaneous deductions were deductible to the extent the total exceeded two percent of your AGI. This deduction is no longer allowed.

Other miscellaneous deductions

The list of other deductions – which includes investment advisory fees, investment related fees, credit card convenience fees, IRA account fees, etc. – all which were subject to the two percent AGI limit, are no longer allowed.

Parking and transit reimbursements

In the 2017 tax year, workers could receive up to $255 per month from their employer towards parking and transit costs, and employers could deduct these reimbursements, which were also tax-free to the employee. Now employers can no longer deduct these reimbursements, so more employers are looking to eliminate these reimbursements to their employees.

Casualty and theft losses

It used to be that if you incurred uninsured losses of property due to fires, flood, earthquake or other disasters that were greater than 10 percent of your AGI, the loss could be claimed as a deduction after subtracting $100 for each casualty loss of personal property. Under the new law, this deduction is only allowed for property damaged in areas which are under a presidential declaration as a disaster area.

Donations to colleges to receive tickets to athletic events

If you donated to a college and received tickets to an athletic event, you are now required to reduce the amount of your charitable donation deduction by the value of any tickets you receive to attend an athletic event. Surprisingly, this reduction for the value of tickets wasn't required in prior years.

First published on January 25, 2019

© 2018 CBS Interactive Inc.. All Rights Reserved.

Ray Martin

View all articles by Ray Martin on CBS MoneyWatch»
Ray Martin has been a practicing financial advisor since 1986, providing financial guidance and advice to individuals. He has appeared regularly as a contributor on the CBS Early Show, CBS NewsPath, as a columnist on CBS Moneywatch.com and on NBC-TV's morning newscast TODAY. He has also appeared on the Oprah Winfrey Show and is the author of two books.

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