Here are the tax breaks Trump's plan would eliminate
Aug 22, 2024, 00:19 IST
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:
- Personal property taxes: Allows deductions of state and local taxes on items like a boat or car.
- Real estate taxes: Allows deductions of state and local taxes on the "value of real property."
- Income taxes: Allows deductions of taxes on wages and other income paid to the state or local government.
- Sales taxes: Can deduct sales taxes paid instead of income taxes. This is mostly used in stats without a state-level income tax like Texas.
- 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.