Haven’t Filed Taxes Recently? Here Are Some Deductions That No Longer Exist
Many people are filing taxes for the first time in a while to claim the balance of their extended Child Tax Credit. If you haven’t filed since before the Trump Administration, you might be surprised to find that many tax deductions have vanished since the Tax Cuts and Jobs Act of 2017 passed.
See: Crazy-Sounding Tax Deductions That Are Actually Legal To Use
Find: How to Avoid Paying Back the Child Tax Credit
Here are a few deductions and exemptions you can no longer claim in the 2022 tax season.
Personal Exemptions for Workers and Dependents
Prior to 2017, taxpayers could subtract $4,050 from their taxable income for themselves and each dependent they claimed. That exemption has disappeared.
Unlimited State and Local Tax Deductions (SALT)
State and local taxes (SALT) used to be fully deductible for taxpayers who itemized expenses. Today’s tax laws cap the deduction at $10,000 annually. Taxpayers who live in high-tax states like New York and California could be losing a substantial deduction with the limit.
Mortgage Interest
Similarly, taxpayers in areas with high property values could be losing out under the new tax laws. Previously, homeowners could deduct mortgage interest payments for mortgages up to $1 million. That cap was reduced to mortgages of $750,000 or less. It might sound like a high limit, but in cities like San Francisco, where the median home price is $1.3 million, it could affect many upper-middle-class taxpayers, not just very wealthy Americans.
Home Equity Loan Interest
Likewise, the interest on your home equity loan may no longer be deductible. The limit to deduct interest payments on a home equity loan has also been set at $750,000 for the first mortgage and home equity loan, combined. Plus, you can only deduct interest on the loan if you are using the money for home improvements.
Itemized Deductions
Many itemized deductions have disappeared for W-2 employees. Employees can no longer deduct fees related to financial services, including tax preparation, professional membership dues, unreimbursed employment expenses, moving expenses (except for members of the military), and alimony payments for couples who separated after Dec. 31, 2018.
See: My Teenager Received a 1099 for Gig Work — Now What?
Find: 1/3 of Child Tax Credit Recipients Don’t Know How It’ll Affect Their Taxes — Here’s What You Need To Know
In spite of the loss of many deductions, the standard deduction of $6,350 for individuals has nearly doubled, to $12,950, and risen to $25,900 for married couples filing jointly and $19,400 for those who file as head of household. With the increased standard deduction, combined with the loss of many other deductions, more taxpayers may opt not to itemize. This can vastly simplify tax filing while ensuring you can receive the money you are owed from the IRS.
More From GOBankingRates
This article originally appeared on GOBankingRates.com: Haven’t Filed Taxes Recently? Here Are Some Deductions That No Longer Exist