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Tax Cuts and Jobs Act of 2017 – Miscellaneous Itemized Deductions

The Tax Cuts and Jobs Act of 2017 (TCJA) was the most significant modification to the tax code since 1986. The changes impact individuals as well as businesses. We have previously provided information regarding the modifications to the Tax Code with a comparison of how it impacts 2018 tax filings versus previous-year filings.  

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A major modification involves the elimination of Miscellaneous Itemized Deductions. Miscellaneous Itemized Deductions include such items as:

  • Union dues, uniforms and safety equipment
  • Tax preparation fees
  • Unreimbursed employee business expenses (i.e., tools)
  • Home office for employees 
  • Investment advisor fees and/or asset management fees
  • Hobby expenses
  • Expenses related to non-business income, and 
  • Attorney fees, among others

Although Miscellaneous Itemized Deductions were eliminated for federal purposes, each state has either conformed, partially conformed or did not conform with TCJA. We have summarized the impact of the elimination of Miscellaneous Itemized Deductions at the federal level and for certain states below.

California Form 540 Adjustments to Federal Itemized Deductions

California did not conform with TCJA, and as a result, the Miscellaneous Itemized Deductions, such as union dues, are adjustments when filing a California return for 2018. For 2018, these expenses, after subtraction of 2% of federal adjusted gross income (Form 1040, Page 2, Line 7), are deductible for California.

2018 Oregon Form OR-40 Adjustments to Federal Itemized Deductions

Oregon ties itemized deductions to what is allowed for federal tax purposes. Thus, the elimination of Miscellaneous Itemized Deductions for federal tax purposes also causes these deductions to be suspended for Oregon tax purposes.    

2018 Illinois Form IL-1040 Adjustments to Federal Itemized Deductions

The state of Illinois does not allow itemized deductions. Thus, the elimination of Miscellaneous Itemized Deductions for federal tax purposes does not impact Illinois filings for 2018 versus 2017.

2018 Washington Adjustments to Federal Itemized Deductions

There is no state income tax return filing requirement in Washington; therefore, the impact of TCJA on Washington state income tax is not applicable. 


We’ve summarized the information above in the following table: 

Federal                   CaliforniaOregonIllinoisWashington 

Eliminiation of Misc. Itemized Deductions

Did not conform to Federal; still may be deductible

Conforms; no longer deductibleNo itemized deductions allowed

No state income tax return filing requirement; N/A

 

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