What is the impact of the Tax Cuts and Jobs Act of 2017 on employee expense deductions?

The Tax Cuts and Jobs Act of 2017 significantly changed the landscape of employee expense deductions by eliminating the deduction for most employees. Previously, employees could deduct unreimbursed business expenses as itemized deductions if they were greater than 2% of their adjusted gross income. However, under the new law, these deductions have been suspended for tax years 2018 through 2025, meaning that most employees cannot claim any deduction for unreimbursed business expenses during this period.

This change had a substantial impact on employees, particularly those who incur costs for travel, meals, uniforms, and certain other expenses connected to their job. The rationale behind this decision was to simplify the tax code and to offset the costs of tax cuts for individuals and businesses.

Options indicating doubled deduction limits or full deductibility of employee expenses are incorrect because the Tax Cuts and Jobs Act did not provide such allowances. Similarly, suggesting that the maximum deductible amount was reduced misrepresents the fact that most employee expense deductions for the majority of employees are no longer available at all.