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Other 2018 Deductions

Note: California did not adopt the new changes and will follow the rules in place for 2017. This will require better record keeping.

Meals & Entertainment

Expense 2018 2017 and prior
Entertainment - golf, theatre tickets, sporting events, meals at these events 0% deductible 50% deductible
Client meals for business 50% deductible 50% deductible
Meals while traveling 50% deductible 50% deductible
Meals provided for convenience of employer - working late meals, meals at seminars, office food and drinks
  • 50% deductible
    (1/1/18-12/31/25)
  • 0% deductible after 2025
100% deductible most of the time but occasionally 50%
Holiday parties, company picnics, and other employee appreciation events 100% deductible 100% deductible

Alimony

  • Alimony will be deductible if the divorce or separation agreement is in place before December 31, 2018.
  • Alimony will not be deductible for divorce or separation agreements finalized in 2019 or later
  • California did not adopt the above changes and will follow the prior law allowing them to be deductible.

Moving Expenses

  • Moving expenses will no longer be deductible and qualified moving expense reimbursements by employers will now be taxable.
  • California did not adopt the changes for moving expenses and will follow the prior law.

Medical Expenses

  • The medical expense threshold is 7.5% of AGI for 2017 and 2018
  • The medical expense threshold will be 10% of AGI starting in 2019.
  • California adopted these changes.

Charitable Donations

  • The AGI limitation was increased from 50% to 60%.
  • The 80% rule for a right to purchase tickets or seating at an athletic event at a college or university has been eliminated.
  • California has not adopted these changes.

Casualty Losses

  • Casualty losses have been eliminated except for a Presidentially declared disaster.
  • California did not adopt these changes.

Miscellaneous Itemized Deductions

  • All miscellaneous itemized deductions that were subject to the 2% floor have been eliminated. This includes the following:
    1. Tax preparation fees
    2. Unreimbursed business expenses including travel, meals & entertainment, mileage, agent, publicist fees, etc.
    3. Home office for employees
    4. Union dues
    5. Uniforms for police, fire, etc.
    6. Continuing education expenses
    7. Investment fees
    8. Attorney fees
  • For non-employees, tax preparation fees, legal, home office expense, and management fees can still be deducted on Schedule C or Schedule E.
  • Gambling losses will continue to be allowed.
  • California did not adopt the above changes.

Itemized Deduction Phaseout

  • The 3% phaseout on itemized deductions for high income earners was eliminated.