Part of President Donald Trump's tax reform outline released on Wednesday would do away with itemized deductions on individuals' tax returns except for the mortgage and charitable giving deductions.
Here's a rundown of the itemized deductions this plan would cut:
- Deductible state and local taxes: Currently, individuals are allowed to deduct their state and local taxes from their federal tax payments. This includes:
- Gambling losses: Losses due to legal gambling can be deducted currently, as long as they are itemized.
- Interest expense: Interest paid on a debt, such as a student loan or mortgage, can be currently deducted. You cannot deduct interest on a personal car loan or credit card debt.
- Union and/or Club expenses: If membership in a union, professional society, or chamber of commerce "helps you do your job," the membership fee can be deducted.
- Moving expenses: If you moved for a new job, the cost of moving can be deducted if itemized.
- Miscellaneous expenses: If an expense on the Internal Revenue Service's list, including tax preparation fees and unreimbursed employee expenses, accounts for more than 2% of a filers gross income, it can be deducted.
The Trump outline is not a finalized plan, and the White House said they could change the plan as they work with Congress, so it is not a guarantee if these deductions will ultimately be eliminated.
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