5 Tax Breaks
That Survived Tax Reform
tax reform legislation affected many provisions in the tax
code. Many were modified, either permanently or
temporarily, while some were repealed entirely. Here
are five that survived.
1. Mortgage Interest Deduction
While the House bill repealed the mortgage interest deduction,
the final version of the act retained it, albeit with
First is that the allowed interest deduction is
limited to mortgage principal of $750,000 on new homes (i.e.,
new ownership). For prior tax years, the limit on acquisition
indebtedness was $1 million.
Existing mortgages are
grandfathered in, however, and taxpayers who enter into
binding contracts before December 15, 2017, to close on the
purchase of a principal residence before January 1, 2018, and
who purchase such residence before April 1, 2018, are able to
use the prior limit of $1 million.
2. Personal Taxes: State and Local Income Tax, Sales Tax and
In prior years, taxpayers who itemize were allowed to deduct
the amount they pay in state and local taxes (SALT) from their
federal tax returns.
Slated for repeal (with the sole
exception of exception of a state and local property tax
deduction capped at $10,000) under both the House and Senate
versions of the tax bill, SALT remained in the final tax
reform bill in modified form.
As such, for taxable years 2018
through 2025, the aggregate deduction for property taxes,
state, local, and foreign income taxes, or sales taxes is
limited to $10,000 a year ($5,000 married filing separately).
3. Educator Expense Deduction
Primary and secondary school teachers buying school supplies
out-of-pocket are still able to take an above-the-line
deduction of up to $250 for unreimbursed expenses. Expenses
incurred for professional development are also eligible. This
deduction was made permanent with the passage of PATH Act of
2015 and survived tax reform legislation that passed in 2017
4. Plug-In Electric Drive Vehicle Tax Credit
slated for elimination in the House bill (but retained in the
final tax reform bill) was the tax credit for the purchase of
qualified plug-in electric drive motor vehicles including
passenger vehicles and light trucks.
For vehicles acquired after December 31, 2009, the minimum
credit is $2,500. The maximum credit allowed is limited to
$7,500. 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 (determined on a cumulative
basis for sales after December 31, 2009).
Medical Expense Threshold Amounts
The House version proposed a repeal of the itemized deduction
related to medical expenses but it was retained (and
temporarily lowered) in the final tax reform legislation. For
tax years 2017 and 2018, the threshold amount for medical
expense deductions is reduced to 7.5 percent of AGI. Under the
PATH Act of 2015, the medical expense deduction increased to
10% of AGI (effective for tax years 2013 to 2016).
Don't miss out!
If you're wondering whether you should be taking advantage of
these and other tax credits and deductions, don't hesitate to
While this list of 5 breaks survived, there are other
important tax changes for 2018. Don't hesitate to call
if you want to get an early start on tax planning for 2018! Help is just a phone call away at
SMEED CPA Adds Financial
Services To Help Clients With
Investments & Insurance
often we here at SMEED CPA are asked about financial issues
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ACA, CPA, CGMA with over 18 years of
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Watch your inbox and mail boxes for more specific information
on services SMEED Financial Services, Inc will make available
Would You Give Me Your
Feedback & Testimonial
on Our Hotline?
Hello it’s Michael Uadiale, CPA of
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Us Be Found on
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As always you can call our offices if you have any
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Regards, Michael Uadiale, CPA,
Managing Partner, SMEED CPA,