Mortgage interest, charitable contributions, and medical expenses
These three deductions remain, but there have been slight tweaks made to each.
•First, the mortgage interest deduction can only be taken on mortgage debt of up to $750,000, down from $1 million currently. This only applies to mortgages taken after Dec. 15, 2017, preexisting mortgages are grandfathered in. And the interest on home equity debt can no longer be deducted at all, whereas up to $100,000 in home equity debt could be considered. •Next, the charitable contribution deduction is almost the same, but with two notable changes. First, taxpayers can deduct donations of as much as 60% of their income, up from a 50% cap. And donations made to a college in exchange for the right to purchase athletic tickets will no longer be deductible. •Finally, the threshold for the medical expenses deduction has been reduced from 10% of AGI to 7.5% of AGI. In other words, if your adjusted gross income is $50,000, you can now deduct any unreimbursed medical expenses over $3,750, not $5,000 as set by prior tax law. Unlike most other provisions in the bill, this is retroactive to the 2017 tax year.
The SALT deduction
Perhaps the most controversial aspect of tax reform on the individual side was the fate of the SALT deduction. Early versions of the bill proposed eliminating the deduction (which stands for "state and local taxes"), which didn't sit well with some key Republicans in high-tax states.
The final version of the bill keeps the deduction, but limits the total deductible amount to $10,000, including income, sales, and property taxes.
Deductions that are disappearing
While many deductions are remaining under the new tax law, there are several that didn't survive, in addition to those already mentioned elsewhere in this guide. Gone for the 2018 tax year are the deductions for:
•Casualty and theft losses (except those attributable to a federally declared disaster) •Unreimbursed employee expenses •Tax preparation expenses •Other miscellaneous deductions previously subject to the 2% AGI cap •Moving expenses •Employer-subsidized parking and transportation reimbursement