Take advantage of these beneficial tax breaks before the new tax plan could make them extinct. When you file your taxes next year you won’t be able to deduct expenses from relocating for a new job. The law will eliminate and change some deductions for the 2018 tax year. That means this year is the last time you’ll see the following 10 deductions on your tax forms, at least until some provisions of the tax law expire in 2025.
1. The Standard $6,350 Deduction
Some of the best news from the tax reform law is an increase in the standard deduction. While single taxpayers are only eligible for a $6,350 standard deduction this year, that amount will nearly double in 2018 to $12,000 for individuals. Married couples will get a standard deduction of $24,000 for 2018, up from $13,000 for 2017. And head of household filers will see a bump in their standard deduction from $9,550 to $18,000 in 2018.
2. Personal Exemptions.
The increased standardized deduction will be welcome news for many households, but there’s a catch. “Taxpayers heard their new standard deductions will double, but they don’t hear about losing their $4,050 personal and dependency exemptions,” says Robert Duquette, professor of practice in the accounting department at Lehigh University.
3. A $1 Million Mortgage Interest Deduction.
Another change that could disproportionately affect those living in states such as California and New York is the restriction on the amount of mortgage interest that can be deducted. Currently, taxpayers can deduct interest on a mortgage of up to $1 million. Starting in 2018, only interest on the mortgage value capped at $750,000 will be deductible.
4. A Deduction For Moving Expenses.
If you relocated for a new job, you may be able to deduct your moving expenses from your 2017 taxes, assuming you meet criteria laid out by the IRS. This criteria stipulates you must be moving to a job location at least 50 miles farther from your old house than the distance from your old house to your old job.
5. Alimony Deduction.
In the past, couples could set up alimony agreements that would allow the person making payments to deduct that money from their federal taxes. That won’t be an option in 2019. The deduction is being eliminated for any divorce commencing after Dec. 31, 2018.