Tax Reform Moving Expense and Depreciation Changes

Tax Reform: Moving, Expense and Depreciation Changes

Last month, the IRS released Notice 2018-42 which provides information to taxpayers and employers about changes imposed by the Tax Cuts and Jobs Act (TCJA) which impact move-related vehicle expenses, non-reimbursed employee expenses and vehicle expensing.

Move-Related Vehicle Expense

The TCJA suspends moving expense deductions for tax years after December 31, 2017 and before January 1, 2026. During this period, no deduction will be allowed for use of an automobile for a move.

Note: This does not apply to members of the Armed Forces on active duty who move as a result of a permanent change of station.

Non-reimbursed Employee Expenses

The TCJA suspends all miscellaneous itemized deductions subject to the 2 percent of adjusted gross income floor. This change affects non-reimbursed employee expenses such as uniforms, union fees or the deduction for business-related meals, entertainment and travel.

Increased Depreciation Limits for Vehicles Used in a Trade or Business

The TCJA has increased the depreciation limitations for passenger automobiles put into service after Dec. 31, 2017, for purposes of calculating the allowance under a fixed and variable rate plan. The maximum standard automobile cost is now maxed at $50,000, an increase from $27,300 for passenger cars and $31,000 for trucks or vans.

If you have any questions about how these expense changes affect you, please contact us today.

Contact Us

Related posts
Executive Compensation - Execs in Boardroom

IRS Proposes Regulations Limiting Public Company Deductions for Executive Compensation Over $1 Million

New IRS proposed regulations provide new info regarding executive compensation for privately held companies that are…

Read More
Payroll Tax - Coins and Calculator on Desk

2020 Payroll Tax Highlights

Payroll tax items for employers in 2020, including due dates and best practices to keep…

Read More