Thanks to the Tax Cuts and Jobs Act (TCJA), you can expect big changes when you file your tax return. The standard deduction has been increased and some itemized deductions have been eliminated or reduced. As a result, it’s anticipated that fewer taxpayers will itemize their return. Keep reading to find out which tax deductions have changed.
Starting in 2018 and effective through 2025, the TCJA has suspended the itemized deduction for casualty and theft losses except for federally declared disasters. Previously, you were allowed to deduct losses due to an unexpected event such as a fire, flood, hurricane, tornado, earthquake, volcano eruption or theft.
Home Equity Loan Interest
2017 was the last year homeowners were able to deduct interest paid on home equity loans if the home equity loan was not used to build, buy or improve their home. If you take out the loan to pay for things like an addition, a new roof or a bathroom renovation, you can still deduct the interest. But if you use the money to pay off credit card debt, student loans or to take a vacation, the interest is no longer an itemized deduction.
The TCJA has limited the state and local tax deduction to $10,000. This will have a significant impact on many tax returns, especially in states where property taxes and/or state income taxes are high. Combined with the higher standard deduction, the cap will make itemizing not worthwhile for many taxpayers.
ezTaxReturn.com®’s easy-to-use question-and-answer process guides you through your return step-by-step and alerts you to missed expenses and credit opportunities. We’ll help maximize your deductions and credits so you get the biggest possible refund the fastest way possible.