Quick Take
A meme is circulating online with false information about changes to tax deductions. Student loan interest, medical expenses, property taxes and charitable donations are still deductible.
Full Story
The Tax Cuts and Jobs Act passed in 2017 is making some changes to the way tax liability will be calculated this year, but nothing as drastic as one viral meme is claiming.
The meme, which has been shared 18,000 times on Facebook, starts out this way: “HERE ARE SOME THINGS YOU WON’T BE ABLE TO DEDUCT ON TAXES THIS YEAR.” Then it lists: “Student loan interest, medical expenses, property taxes, and any home office expenses not paid by my company. Also, the threshold for charitable donations has increased so you can forget recouping the donations to Wounded Warriors, Habitat for Humanity, and PBS.” It ends by claiming that, “If you own a private plane or jet you can deduct the maintenance of the aircraft.”
A lot of that is wrong and some of it is misleading.
Let’s start with the claim that certain deductions have been eliminated. Four out of the five that are listed in the meme haven’t been eliminated and the one has been. Here’s how the new tax law treats these deductions:
- Interest paid on student loans is deductible up to $2,500;
- Medical and dental expenses are deductible if they exceed 7.5 percent of the taxpayer’s adjusted gross income for 2018. The previous threshold had been 10 percent except for filers 65 or older, who could deduct those expenses over 7.5 percent;
- The deduction for state and local income, sales, and property taxes is limited to a combined total of $10,000;
- Home office expenses are no longer deductible for those who have an employer and work from home, but they are still deductible for those who are self-employed and work from home;
- Charitable donations are deductible for cash contributions that total 60 percent of the taxpayer’s adjusted gross income. The previous limit had been 50 percent, meaning that donors can now deduct more of their charitable contributions.
As for deducting the cost of private plane maintenance, Christopher Younger, a business aviation lawyer at GKG Law, said that deduction was already available to some taxpayers. What’s new is that used planes, not just new ones, are eligible for deductions. But, as always, the deductions are not available for recreational planes, only those that are used for business.
The larger issue that isn’t mentioned in the meme, though, is that most people don’t itemize their taxes, anyway. Most people take the standard deduction, which reduces the total amount of income that’s eligible to be taxed. The number of people who do that is expected to go up this year since the new law has nearly doubled the standard deduction through the year 2025.
For single filers, it is now $12,000 instead of $6,350 and for a married couple filing jointly, it is $24,000 instead of $12,700. However, the new law eliminated the personal exemption, which used to provide $4,050 for each taxpayer and dependent claimed on a tax return. (See “A Guide to the Tax Changes” for more information.)
Of the 150 million taxpayers in the country, the Joint Committee on Taxation has estimated that 46.5 million chose to itemize their deduction for the 2017 tax year, but only 18 million will choose to do so with the law’s higher standard deduction in effect for the 2018 tax year.
Updated, March 1: We added more detailed information about the previous threshold for deducting medical and dental expenses.
Editor’s note: FactCheck.org is one of several organizations working with Facebook to debunk misinformation shared on the social media network.
Sources
U.S. House. “H.R.1 – An Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018.” As passed 22 Dec 2017.
Internal Revenue Service. Tax Reform — Basics for Individuals and Families. Accessed 27 Feb 2019.
Internal Revenue Service. Topic Number 456 – Student Loan Interest Deduction. Accessed 27 Feb 2019.
Internal Revenue Service. Topic Number 502 – Medical and Dental Expenses. Accessed 27 Feb 2019.
Internal Revenue Service. Topic Number 503 – Deductible Taxes. Accessed 27 Feb 2019.
Internal Revenue Service. Publication 587 (2018), Business Use of Your Home. Accessed 27 Feb 2019.
Joint Committee on Taxation. Tables Related To The Federal Tax System As In Effect 2017 Through 2026. 24 Apr 2018.
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