Tax Blog #3: Itemized Deductions for 2018 in the US

This is my 3rd post in my series of detailing the new Tax Cuts and Jobs Act in the US. In this post I am going to go over some of the major things that will change with itemized deductions. The first big item is that itemized deductions for state and local property taxes will be limited to $10,000 or $5,000 if married filing separate returns. This is going to hurt taxpayers who live in high state tax states.

The next big change is that the 2% miscellaneous itemized deductions will be eliminated. Some examples of what these deductions are: employee home office expenses, safe deposit rental fees, expenses allowed under the hobby loss rules, etc. Another thing that will eliminated is the deduction for un-reimbursed employee business expenses. Make sure that you have your employer reimburse you, if you have any employee business expenses. These expenses will be deductible for the employer. They will not be allowed to be deducted by the employee starting in 2018. Some examples of un-reimbursed employee business expenses are costs of travel, transportation, lodging, meal, uniforms.

Another change is that there will be no deduction allowed for personal casualty and theft losses except for federally declared disaster losses. Also the act is repealing the exclusion for employer's reimbursed moving expenses unless you are in the Armed Forces, then you can exclude these reimbursements. The act also eliminates the deduction for moving expenses except for Armed Forces.

These are just a few of the many changes for itemized deductions for 2018. Tax planning tip: Make sure in 2018 that all un-reimbursed employee business expenses are reimbursed to you. If not, you are basically paying your employer to work for them.