WHILE nearly all articles relate to change, let’s depart from that norm and discuss a few deductions that won’t change.
1. Student loan interest deduction:
The Tax Cuts and Jobs Act (TCJA) allows student loan borrowers to deduct up to $2,500 on the interest paid for student loans every year. Student loan interest is interest you pay during the year on a qualified student loan. It includes both required and voluntarily pre-paid interest payments. You claim this deduction as an adjustment to income, so you don’t need to itemize your deductions
2. Electric cars:
Electric car owners who bought vehicles after 2010 may be given tax credit of up to $7,500, depending on the battery capacity. The credit begins to phase out for a manufacturer’s vehicles when at least 200,000 qualifying vehicles have been sold for use in the United States. The situation is quite fluid as the Trump administration wants to stop the federal tax credit while other Republicans want to remove the cap and expand them instead. Tesla and GM have reached their quotas. For Tesla, the credit is reduced from $7,500 to $3,750 for vehicles delivered from January 1 to June 30, 2019 and further reduced to $1,875 for deliveries from July 1 to December 31, 2019. Ford, Nissan, and Toyota have reached half point while BMW has reached a third by the end of 2018.
3. Teacher deduction:
If you’re an eligible educator, you can deduct up to $250 ($500 if married filing jointly and both spouses are eligible educators) of unreimbursed trade expenses. Qualified expenses are amounts you paid or incurred for participation in professional development courses, books, supplies, computer equipment, software, other equipment, and supplementary materials that you use in the classroom. For courses in health or physical education, the expenses for supplies must be for athletic supplies.
4. Adoption assistance:
Tax benefits for adoption include both a tax credit for qualified adoption expenses paid to adopt an eligible child and an exclusion from income for employer-provided adoption assistance. The credit is nonrefundable, which means that it’s limited to your tax liability for the year. However, any credit in excess of your tax liability may be carried forward for up to five years. The maximum credit and the exclusion for employer-provided benefits are both $13,810 per eligible child in 2018.
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Victor Santos Sy graduated Cum Laude from UE with a BBA and from Indiana State University with an MBA. Vic worked with SyCip, Gorres, Velayo (SGV – Andersen Consulting) and Ernst & Young before establishing Sy Accountancy Corporation in Pasadena, California.
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He has 50 years of experience in defending taxpayers audited by the IRS, FTB, EDD, BOE and other governmental agencies. He is publishing a book on his expertise – “HOW TO AVOID OR SURVIVE IRS AUDITS.” Our readers may inquire about the book or email tax questions at firstname.lastname@example.org.