Tax Law Changes from 2018 - 2019

Here are some of the big items to note:

Misc. Itemized Deductions gone:

Un-reimbursed Job expenses: Work related items paid out of your pocket (travel/meals/ insurance etc…)

Investment expenses: Fees for investment advice, management, tax or legal advice.

Tax preparation fees: Cost of Tax preparation software/hiring tax professional or buying tax publications are gone, but also gone are deductions for electronic filing fees and fees you pay to fight the IRS including attorney and accounting fees.

Hobby Expenses: Expenses up to the amount of income you earned are no longer deductible even though you have to report and pay tax on the income. If you sell products, you can still deduct the cost of the product.

Itemized Deduction left:

Gambling losses: Up to the amount of your winnings

Graduate Student tuition: waivers remain tax free

Interest on student loans: Still tax deductible even if you don’t itemize

Classroom teacher deduction: The $250 deduction is still effective even if the teacher is not itemizing

Standard Mileage rate: Medical reasons = $.20 per mile and charity = $.14 per mile.

The new pass-through income deduction:

Designed as a tax break for small business owners, the Tax Cuts and Jobs Act includes a 20% deduction for “pass-through” income. This includes income you receive from a sole proprietorship or other pass-through entities such as partnerships, LLCs, and S-Corps. Real estate income counts, as do dividends you receive from REIT (Real Estate Investment Trust) stocks.

Your standard deduction for Single Filers is $12,200, Married filling joint is $24,400, and Head of household is $18,350. These have increased slightly from 2018.

Here are the current tax brackets for 2019.