Standard Deduction “Doubled”?
The new standard deduction has been simplified.
With the elimination of the valuable personal exemption, the standard deduction has roughly doubled for all filers. For example, currently a single filer would be entitled to claim a standard deduction of $6,500 and personal exemption of $4,150 in 2018, totaling $10,650 in income exclusions. While the standard deduction under the new tax plan is higher at $12,000, it hasn’t exactly “doubled”.
Tax Breaks for Parents
The loss of the personal exemption would hit households with larger families the hardest. To offset this loss, the new tax plan has expanded Child Tax Credit, doubling the credit from $1,000 to $2,000, and also increased the amount of the credit that is refundable to $1,400.
While many deductions remain under the new tax law, there are several that didn’t survive, including:
- Casualty and theft losses (except those attributable to a federally declared disaster)
- Unreimbursed employee expenses
- Tax preparation expenses
- Other miscellaneous deductions previously subject to the 2% AGI cap
- Moving expenses
- Employer-subsidized parking and transportation reimbursement
Affordable Care Act (Penalties)
Republicans were unsuccessful in their efforts to repeal the Affordable Care Act (Obamacare) in 2017. However, the tax reform bill repeals the individual mandate, meaning that people who don’t buy health insurance will not have to pay a tax penalty. However, this change won’t go into effect until 2019, so for 2018, the “ACA Penalty” can still be assessed.
Still Have Quetions?
Consult with ATC tax service experts, they can answer questions about the new tax bill. In addition, if you could use and advance on your taxes early, you have the option of applying for our interest free tax refund loan instead of waiting for the IRS to process your return. Tax service and Tax Related Financial Products are available – many locations to serve you in Atlanta and Milwaukee markets, Book Now.