The Tax Cuts and Jobs Act: What it has Removed

         So much has been made about what Tax Reform will change. For the most part, the focus has been on what it can add to the financial landscape for taxpayers and businesses. This is true. However, this sweeping change to Tax Law has also removed a variety of credits and deductions that many have come to view as normal. Let’s take a look at some of what is no longer available to use.

          Business entertainment deductions have been a staple for many companies. When celebrating business relationships most firms enjoy going out for a good meal. In the past, up to 50% of those costs could be deducted from taxes. Now that number is 0. For those involved in some form of alimony payments, the one receiving could count it as income; the one paying could count it as tax-deductible. That will continue for most. However for those who are divorced after December 31, 2018 it will change. These payments will no longer be counted as income or allowed to be tax deductible.

          Sadly, an aspect of life today is that we must endure loss in one form or another. When it came to loss due to theft, fire or flood a Taxpayer could claim a deduction, if that loss equaled at least 10% of their income. Now that option is now longer available, unless the damage is related to a declared Federal Disaster. For those who have to maintain certifications, licenses, or have other expenses directly related to their jobs, they could ask for reimbursement from their employer. If refused, they had the option of deducting direct job expenses as long as they amounted to more than 2% of their overall income. In Tax Year 2018 that will no longer be an option. The Tax Cut and Jobs Act is like a layer cake in its variety, detail, and complexity. In the coming weeks we will begin to understand more about how its 1097 pages will affect us.

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