Yesterday, I received an alert from the professional that prepares my income taxes:
I know that Congress has not yet finalized the new tax law, but it looks pretty certain that Certain Miscellaneous Deductions will no longer be allowed in 2018. If you want to know if that affects you, see if there is an entry on your Schedule A, Line 27 from 2016. If you take the standard deduction, then don’t worry about it. These deductions include expenses for using your car on the job, un-reimbursed overnight travel and meals, union dues, uniforms, tools, and job training/education.
Some of my clients have huge union dues (police officers, carpenters, electricians, etc.) and others have Second Job Travel or 10-30,000 miles a year in their sales jobs. Every one of you will be hurt by this change.
If there are any expenses you can pay in December, be sure to do that so you can save 15 - 25% on your federal taxes... maybe even more. For example, do you have the option of paying your annual union dues all at once in December? Were you planning to buy a computer used for your job sometime soon? Is there a job-related course... or some tools and supplies... that you can pay for in December rather than next year? Remember... every $100 that you pay in December will save you $15 to $33 in taxes when we meet in a couple months...”
If you haven't consulted with your tax advisor, then now seems to be a good time to do so. I am not an income tax professional, and this blog post is informational.
Many people return to school to get better, high-paying jobs, or as required by their profession. The tax code allows companies to deduct expenses for business and trade associations, so why prevent union members from doing so? It seems that taxpayers with plenty of miscellaneous deductions will be hurt more than persons with fewer or no deductions.
And Republicans are probably hoping that voters won't notice nor feel the pain until after the 2018 elections. President Trump and the Republications promised to help the middle class and poor with tax reform, but the above impacts don't seem helpful. The benefits of lower tax rates are offset by the lost deductions. To use an old saying, that seems like Congress and Republicans are giving taxpayers, "the sleeves off their vests."
You might say this is a "mugging" of many taxpayers. What are your opinions?