2018 Tax Law Changes: Workplace Deductions

For years a common tax advantage for employees was the workplace expense deduction. Included when a tax filer itemized his deductions instead of taking the standard deduction, the workplace expense category covered everything from meals eaten for business purposes/meetings to materials bought for the job on a regular basis and still does for 2017 filers. 

With the new year under way the first threshold a filer must meet in 2018 is exceeding the level of standard deduction. For individuals that will now be $12,000 and for those married $24,000. If total itemized deductions add up to less, a filer is required to use the standard deduction, which in effect wipes out any use of the workplace expense deduction automatically. Second, if itemized deductions are more in total, then the workplace expenses used must equal more than 2 percent of adjusted gross income reported in the tax year. Again, failure to meet this second threshold also wipes out the use of the deduction. 

Under the 2018 tax law changes workplace expenses associated with qualified relocation and moving costs are now no longer deductible from 2018 to 2025; active duty military personnel under active orders are exempted from this new restriction. Additionally, businesses expenses paid to entertain guests and similar, even if directly related to the business, are not allowed as a workplace expense deduction anymore. New changes have also significantly limited deducting work-related transportation expenses as well. Further changes put a cap on what can be deducted for employee award costs as well, crimping a deduction loophole some managers used for out-of-pocket expenses rewarding an employee. Finally, a plethora of miscellaneous expenses have been suspended until 2026 that used to make up the 2 percent floor deduction (legal fees for work, dues for professional associations, business liability coverage, home office costs for a job, passport fees, collective bargaining costs and quite a bit more).

So the word on the street now is, don't guess. Given all the tax changes, the smartest move a filer can make is to work with a certified tax preparer or licensed tax attorney when preparing tax filings in 2018. The professional advice will be more helpful and powerful this year than it has been in a decade given all the new changes that apply to the average private person. Call Travis W. Watkins Tax Resolution and Accounting Firm for your FREE consultation at 800-721-7054. 

Travis Watkins
Senior Tax Attorney
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