Jump directly to the content

Responding to the Elimination of the Business Expense Deduction

This tax reform change might mean it’s time to start an accountable reimbursement plan.

Responding to the Elimination of the Business Expense Deduction

Prior to the Tax Cuts and Jobs Act of 2017, certain business expenses were deductible if, in aggregate, they exceeded 2 percent of the taxpayer's adjusted gross income (AGI), said Richard Hammar, tax attorney, CPA, and senior editor of Church Finance Today.

Some expenses subject to the 2 percent AGI floor included:

  • overnight out-of-town travel;
  • local transportation;
  • meals (subject to a 50 percent AGI floor);
  • entertainment (subject to a 50 percent AGI floor);
  • home office expenses;
  • business gifts;
  • dues to professional societies;
  • work-related education;
  • work clothes and uniforms if required and not suitable for everyday use;
  • malpractice insurance;
  • subscriptions to professional journals and trade magazines related to the taxpayer's work; and
  • equipment and supplies used in the tax- payer's work.

The Tax Cuts and Jobs Act, however, "suspends all miscellaneous itemized deductions that are subject ...

Join now to access this member-only content

Become a Member

Already a member? for full access.

Related Topics:
Posted:
  • August 15, 2018

Related ResourcesVisit Store

2021 Church & Clergy Tax Guide (PDF)
2021 Church & Clergy Tax Guide (PDF)
The most comprehensive and authoritative tax guide available.
2021 Church & Clergy Tax Guide (Book)
2021 Church & Clergy Tax Guide (Book)
The most comprehensive and authoritative tax guide available.
2020 Church & Clergy Tax Guide
2020 Church & Clergy Tax Guide
Find comprehensive help understanding United States tax laws as they relate to pastors and churches.