Will you itemize deductions in 2018? Part II
- Posted on: Jan 19 2018
The following is how Schedule A will be affected for the 2018 tax year (in the order on Schedule A):
4 Gifts to Charity. The tax reform raises the limit deductible for charitable for cash donations from 50 percent of AGI to 60 percent AGI. Most of taxpayers who itemized claimed a charitable contribution. Some taxpayers who will lose the value of some deductions may make up the difference by contributing more. But keep in mind: get a receipt!
5 Casualty and Theft Losses. This deduction is gone for 2018 except for those losses in federally declared disaster areas.
6 Job Expenses and Miscellaneous Deductions subject to 2 percent floor. This deduction is gone as well. This includes unreimbursed employee expenses, dues and subscriptions, job search expenses, tax preparation fees, and home office deduction. This does not affect business owners who file Schedule C.
As a conclusion, for taxpayers who used to itemize, it may no longer work if the new higher standard deduction exceeds what their itemized deductions would have been. And while taxpayers benefit from a higher standard deduction, personal exemptions are no longer allowed, which would have reduced taxable income. This, in turn, may be offset by a lower tax rate. Each taxpayer’s situation is different.
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