Original Article From The Motley Fool by Dan Caplinger
Tax reform took effect more than a year ago, and investors have benefited from the boost that corporations immediately felt from big rate cuts for businesses. But only now are most individual taxpayers getting a chance to see the impact that the new tax laws will have on how much they pay to the IRS when they file their returns in the coming months.
Individuals will benefit from lower taxes, higher standard deductions, enhanced tax credits, and some other favorable provisions. However, there are some tax breaks that tax reform eliminated in order to offset the cost of the cuts elsewhere. Below, you’ll learn about five key deductions that won’t be available to take on your 2018 returns in the same way as before.
1. No more personal exemptions
Probably the most controversial provision among lost tax breaks in 2018 was the elimination of the personal exemption. In 2017, taxpayers got to reduce their taxable income by $4,050 for themselves and for every person they could claim as a dependent. Those breaks were especially important to families, with a typical couple with three children getting to write off more than $20,000 in income due to personal exemptions.
Tax reform eliminated these, but two factors offset the tax pain resulting from that move. First, the standard deduction nearly doubled, effectively wrapping in the personal exemption within a single tax provision. Second, the child tax credit doubled and broadened its scope, boosting income limits to let more people claim the $2,000-per-child credit. Combined, those factors will often weigh in taxpayers’ favor, but regardless, not everyone’s happy about the loss of the personal exemption.
2. Moved in 2018? There’s no write-off for the costs unless you’re in the military
Moving expenses were also a casualty of tax reform, with the popular deduction disappearing for 2018. Until last year, moving expenses were deductible if your new job was at least 50 miles farther from your old home than your old job was. The new rule simply eliminates the deduction entirely, except that members of the military on active duty are still allowed to take the deduction… Continue reading on original publication site
