Taxes

6 Tax Deductions That Went Extinct in 2018

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The Tax Cuts and Jobs Act of 2017 was called one of the largest tax overhauls in 30 years. It went into effect at the beginning of 2018, which means taxpayers are starting to feel the impact now. Some households will benefit from it, others will not. Here are some deductions that have been eliminated or reduced.

Moving Expenses
Unless you or a spouse is in the military and is currently on active duty, you won’t be able to take any deductions for moving. In the past, those who moved for a job and paid the moving cost could deduct most of their expenses.

Personal Deductions
Deductions for personal exemptions, which can be worth $4,050 for each exemption, were eliminated and replaced with a larger standard deduction and an expanded child tax credit.

Paying Alimony
If you’re paying alimony on a divorce finalized before December 31, 2019, then you can deduct those payments one last time.

Unreimbursed Job Expenses
This fell into the category of miscellaneous itemized deductions, an area that has been greatly reduced by the latest tax laws. It means that anything an employee pays for while on the job and doesn’t get reimbursed for, is not deductible.

State and Local Taxes
You used to be able to fully deduct any amount of state or local taxes. Now that cap is set at $10,000 meaning those with high state income and property taxes will get much less back.

Tax Preparation Fees
Tax preparation fee deductions were eliminated as part of the miscellaneous fees. This is will occur from 2018-2025. That means you cannot deduct payments to accountant, tax prep firms, or tax preparation software.

The Business & Tax Benefits of Westchester County

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Thinking of starting a business?

Westchester County is the perfect place to start a business. There are lots of countywide programs to get your business off the ground and geographical benefits from being in Westchester County.

Proximity to NYC

Depending on where you are in Westchester County, you’ll be close to the bustling economic center of New York City without having to deal with commuting to the city.

You’ll also be located close to Connecticut and parts of upstate New York.

That means you’ll be within drivable range for all of these areas.

Get Ahead With Westchester’s IDA Program Benefits

Westchester County Industrial Development Agency (IDA) can help you grow or start your business.

Use the benefits from this program to:

  • Build or renovate office parks or buildings
  • Develop mixed-use projects including hotels, marketers, medical office space, etc.
  • Support extensive multi-family and multi-use residential

This past January, the agency funded $391 million worth of residential projects in 2019. They’ve helped get hundreds of businesses off the ground and have given them a variety of benefits. For more details, check out IDA’s website.

Tax Exemptions

The IDA agency can also provide exemptions for use and sales tax in the following areas:

  • Construction
  • Furnishings
  • Business equipment
  • Related capital improvements

Check out the policy here.

Westchester County wants businesses to move in, so find out what both the county and the town/city you’re in offers in the way of incentives.

Image: Fred Murphy/C.C 2.0

When an Elderly Parent Might Qualify as Your Dependent

Westchester NY accountant Paul Herman of Herman & Company CPA’s is here for all your financial needs. Please contact us if you have questions, and to receive your free personal finance consultation!

It’s not uncommon for adult children to help support their aging parents. If you’re in this position, you might qualify for an adult-dependent exemption to deduct up to $4,050 for each person claimed on your 2017 return.

Basic qualifications

For you to qualify for the adult-dependent exemption, in most cases your parent must have less gross income for the tax year than the exemption amount. (Exceptions may apply if your parent is permanently and totally disabled.) Social Security is generally excluded, but payments from dividends, interest and retirement plans are included.

In addition, you must have contributed more than 50% of your parent’s financial support. If you shared caregiving duties with one or more siblings and your combined support exceeded 50%, the exemption can be claimed even though no one individually provided more than 50%. However, only one of you can claim the exemption in this situation.

Important factors

Although Social Security payments can usually be excluded from the adult dependent’s income, they can still affect your ability to qualify. Why? If your parent is using Social Security money to pay for medicine or other expenses, you may find that you aren’t meeting the 50% test.

Also, if your parent lives with you, the amount of support you claim under the 50% test can include the fair market rental value of part of your residence. If the parent lives elsewhere — in his or her own residence or in an assisted-living facility or nursing home — any amount of financial support you contribute to that housing expense counts toward the 50% test.

Easing the burden

An adult-dependent exemption is just one tax break that you may be able to employ on your 2017 tax return to ease the burden of caring for an elderly parent. Contact us for more information on qualifying for this break or others.

Any U.S. tax advice contained in the body of this website is not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions.