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New Deduction-Related Changes Enacted


Late last year, Congress made significant changes to U.S. tax law when it passed the Tax Cuts and Jobs Act. Many of these changes will affect not only individual taxpayers, but also their employers. For instance, under the terms of the new amendments, all miscellaneous itemized deductions that were formerly subject to the two percent of adjusted gross income floor will now be suspended. It is anticipated that this change will primarily affect employee expenses that cannot be reimbursed, such as union dues, uniforms, and deductions for meals, entertainment, and travel if the expenses were accrued for business purposes. These are not the only major changes made by the new tax law, so if you have questions about these or other provisions contained in the tax code, it is critical to speak with an experienced tax law attorney who is well-versed in both state and federal law and can help determine which changes apply to you or your business.

Move-Related Vehicle Expenses  

Beginning on December 31 of last year and extending to January 1, 2026, taxpayers will no longer be permitted to submit deductions for moving expenses. However, the rule only applies to vehicles, so taxpayers will only be prohibited from making deductions for the use of a vehicle as part of a move. The only exception to this rule applies to members of the Armed Forces who are on active duty and who relocate pursuant to a military order requiring a permanent change of station.

Un-Reimbursed Employee Expenses  

As previously mentioned, the recent tax amendments also made changes to the rules regarding miscellaneous itemized deductions, but only to those deductions that are subject to the two percent gross income floor. Although this change affects many types of un-reimbursed expenses, it is primarily aimed at travel-related expenses, which means that taxpayers can no longer use the business standard mileage rate that was in place prior to the passage of the Tax Cuts and Jobs Act to claim itemized deductions for un-reimbursed employee travel costs incurred after December 2017.

The last major change made by the Tax Cuts and Jobs Acts increases the depreciation limits for passenger vehicles when calculating the allowance under a fixed and variable rate plan. However, these limitations only apply to vehicles that were placed into service after December 31, 2017. According to the terms of the new statute, the maximum standard vehicle cost cannot exceed $50,000 for passenger trucks, vans, or any other type of vehicle. Before these changes were enacted, the maximum standard for vehicle cost differed depending on the type of car, with the limit for standard vehicles being set at $27,300 and the threshold for vans and trucks set at $31,000.

Call Today to Consult with an Experienced Tax Law Attorney  

If you have questions about how the new law affects your tax-related rights and obligations, you need the advice of an experienced tax law attorney. Dedicated Florida tax attorney Ronald Cutler, P.A. is available to address your questions and concerns and can be reached by calling 386-490-9949 today.