By now most of us are aware that the new tax rules will impact our Federal tax returns; a large portion of expenses have been reduced OR disallowed under the new tax law (known as TCJA).
Since the law has been enacted, lawmakers of various states with personal income tax obligations have continued to lobby to make them more favorable, and many believed the battle was lost. However, NYS chose to “sever its ties with the IRS” in an effort to help its individual taxpayers.
Generally, most states have their own tax rules that taxpayers are required to follow; they often treat certain transactions in the same manner that the IRS does.
For 2018 tax year and after, New York State will not follow the same tax rules as the IRS (Federal) as is customary. NYS chooses not to follow (to “decouple”) the IRS with disallowing the federal itemized deduction changes made by the TCJA for tax years 2018 and after. As a result, you may be able to claim certain deductions that are limited or disallowed for Federal tax purposes.
Here are some of the deductions you are allowed to claim:
- State and local real estate taxes paid, including amounts over the $10,000 federal limit
- Casualty and theft losses, including those incurred outside a federally declared disaster area
- Un-reimbursed employee business expenses
- Certain miscellaneous deductions that are no longer allowed federally (e.g. tax preparation fees, investment expenses, and safe deposit box fees)
There are some other areas that will be allowed by NYS:
- Alimony or separate maintenance payments
- Qualified moving expenses reimbursement and moving expenses
Please see here to learn of all the areas.
Often as humans we do our best to meet on common ground for a common goal; however, whenever there are few or no commonalities, it may to best to “cut the cord” and stop following the leaders.
Hope you find this information useful. As always, please reach out with any questions.
Nadine Riley, CPA
Founder, Masterpiece Accounting Group
Phone: (212) 966-9301