Notable Deductions Eliminated from US Tax Code
The end of 2017 saw the enrollment of historic tax code reform legislation—the Tax Cuts and Jobs Act (TCJA). Among the numerous changes included in the sweeping update was the elimination of a variety of miscellaneous deductions. Read on to learn about three particular deductions written out of the tax code and the expected consequence—or lack thereof—of their absence come the 2018 filing season.
The TCJA eliminated deductions for the following:
Investment Expenses – Fees associated with investments, such as quarterly asset management fees, custodial fees, or trust administration fees.
Unreimbursed Employee Expenses – Ordinary and necessary expenses accrued for carrying on the business of being an employee. Examples include business liability insurance premiums, dues to professional societies, and work-related education costs.
Tax Preparation Fees for Personal Tax Returns – Fees associated with the preparation and/or filing of personal tax returns, including the cost of tax preparation software and electronic filing.
The impetus for abolishing a large swathe of miscellaneous deductions was an overall simplification of the U.S. Tax Code. In an effort to counter-balance the eliminations, the TCJA included a substantial increase in the standard deduction. As such, significantly fewer taxpayers will end up itemizing their deductions come the 2018 tax season, so will not feel the absence of these particular deductions. Reach out to your DeLeon & Stang tax advisor to discuss these changes.