The Tax Cuts and Jobs Act of 2017 eliminated or capped several deductions that taxpayers had relied on for decades. These changes were originally set to expire at the end of 2025, but the One Big Beautiful Bill Act (signed July 2025) made them permanent. If you have been waiting for these deductions to come back, they are not coming back.
For a comprehensive overview of the TCJA and its current status, see our TCJA reference guide.
Personal Exemptions
Before the TCJA, taxpayers could claim a $4,050 exemption for themselves, their spouse, and each dependent, directly reducing taxable income. The TCJA eliminated personal exemptions entirely.
To partially offset this, the law nearly doubled the standard deduction. For 2026, the standard deduction is $16,100 for single filers and $32,200 for married couples filing jointly. The practical effect: roughly 90% of taxpayers now take the standard deduction instead of itemizing. Before the TCJA, about 30% itemized.
For families with children, the expanded child tax credit ($2,000 per child under 17, with a $1,600 refundable portion) partially replaces the value of lost personal exemptions. But for taxpayers without children who previously claimed personal exemptions, the math is less favorable.
State and Local Tax (SALT) Deduction
The TCJA capped the deduction for state and local taxes at $10,000. Before the law, this deduction was unlimited. You could deduct the full amount of your state income tax (or sales tax) plus property taxes.
The $10,000 cap applies to the combined total of state income taxes, local income taxes, and property taxes. For taxpayers in high-tax states with high property values, this cap alone can mean tens of thousands of dollars in lost deductions.
Combined with the higher standard deduction, the SALT cap is the primary reason most taxpayers no longer benefit from itemizing. If your property taxes, state income taxes, mortgage interest, and charitable contributions no longer exceed the standard deduction, itemizing provides no tax benefit.
For strategies to manage the SALT cap's impact, including charitable giving bunching and donor-advised funds, see our year-end financial checklist.
Mortgage Interest Deduction
For mortgages taken out after December 15, 2017, the deductible interest is limited to debt up to $750,000 (down from $1,000,000). Mortgages in place before that date are grandfathered at the $1,000,000 limit.
The deduction for home equity loan interest was eliminated unless the loan is used to buy, build, or substantially improve the home that secures the loan. Previously, homeowners could deduct home equity loan interest regardless of how the funds were used.
Unreimbursed Employee Expenses
Before the TCJA, employees who incurred unreimbursed work-related expenses (tools, uniforms, travel, continuing education, home office costs) could deduct amounts exceeding 2% of their adjusted gross income as a miscellaneous itemized deduction.
This deduction is gone entirely. Employees who pay out of pocket for work-related expenses have no federal deduction. Self-employed taxpayers can still deduct business expenses on Schedule C, which is one reason the elimination disproportionately affects W-2 employees.
If your employer offers an accountable reimbursement plan, that remains the most tax-efficient way to handle work expenses.
Miscellaneous Itemized Deductions
The TCJA eliminated all miscellaneous itemized deductions that were previously subject to the 2% AGI floor. This includes tax preparation fees, investment advisory fees, safe deposit box rental, legal fees related to tax advice, union dues, and hobby expenses (to the extent they previously offset hobby income).
A few related deductions survived: investment interest expense (the interest paid on margin loans used for investments) remains deductible, and gambling losses remain deductible up to the amount of gambling winnings.
Casualty and Theft Loss Deduction
Before the TCJA, you could deduct casualty and theft losses exceeding $100 per event and 10% of AGI. The TCJA restricted this deduction to losses from federally declared disasters only. Losses from theft, fire, flood, or storm that are not in a presidentially declared disaster area are no longer deductible.
Moving Expenses Deduction
The deduction for moving expenses related to a job relocation was eliminated for all taxpayers except active-duty military members who move under orders. Before the TCJA, anyone who moved at least 50 miles for a new job could deduct moving costs. Employer reimbursements for moving expenses are now taxable income (except for active-duty military).
Alimony Deduction
For divorce or separation agreements executed after December 31, 2018, alimony payments are no longer deductible by the payer and are no longer taxable income to the recipient. Agreements finalized before that date are grandfathered under the old rules (deductible by payer, taxable to recipient) unless the agreement is modified to adopt the new treatment.
What Still Works
Not everything changed. Several deductions survived the TCJA intact or with minor modifications.
Charitable contributions remain deductible for itemizers. The TCJA actually increased the AGI limit for cash contributions to public charities from 50% to 60% (now permanent). For taxpayers who no longer itemize, strategies like bunching donations into a single year or using a donor-advised fund can restore the tax benefit.
Medical expenses remain deductible to the extent they exceed 7.5% of AGI.
Student loan interest (up to $2,500) remains deductible as an above-the-line deduction, available even if you do not itemize.
Educator expenses (up to $300 for K-12 teachers) remain deductible above the line.
Planning Around the New Landscape
The elimination of these deductions shifts the planning conversation. The key question is no longer "what can I deduct?" but rather "does it make sense to itemize at all?"
For most taxpayers, the answer is no. The standard deduction ($16,100 single / $32,200 MFJ for 2026) sets a high bar. But for those who can clear it through a combination of mortgage interest, charitable contributions, and the $10,000 SALT cap, itemizing still saves money.
The taxpayers most affected are W-2 employees in high-tax states with significant unreimbursed work expenses and no employer reimbursement plan. The combination of losing employee expense deductions, the SALT cap, and the lower mortgage interest ceiling can add thousands to their effective tax bill.
For a broader view of how the TCJA reshaped tax planning, see our TCJA overview. For current contribution limits and income thresholds, see our tax and retirement savings changes reference.
For help evaluating how these changes affect your tax strategy, start a conversation with us.
