A recent IRS announcement includes information for employers and taxpayers about changes stemming from the new tax law that affect some job-related deductions. Specifically, the announcement addresses deductions for:
Move-Related Vehicle Expenses: The IRS has suspended the deduction for moving expenses for tax years beginning after December 31, 2017, and before January 1, 2026. During this time, employees will not be allowed to take a deduction for use of an automobile as part of a move using the mileage rate in Notice 2018-03. The one exception to this suspension is for service people on active duty moving as a result of a permanent change of station.
Un-Reimbursed Employee Expenses: As a result of the new tax law, all miscellaneous itemized deductions subject to the 2 percent of adjusted gross income floor are also suspended for tax years beginning after December 31, 2017, and before January 1, 2026, such as unreimbursed employee expenses for:
- Union dues
- Business-related meals, entertainment and travel
Mileage Rates for 2018: Per Notice 2018-03, the standard mileage rates for a car, van, pickup or panel truck for 2018 are:
- 54.5 cents for every mile of business travel driven
- 18 cents per mile driven for medical purposes
- 14 cents per mile driven in service of charitable organizations
Instead of the standard mileage rates, taxpayers can opt to calculate the actual costs of using their vehicle.
For more information about these job-related deduction changes, contact Complete Payroll Solutions at 866.658.8800.