Posted on: April 24th, 2018

In December, President Trump signed a new tax bill into law. One noticeable change was the doubling of the standard deduction. This means that for single taxpayers, the standard deduction has increased to $12,000. For married taxpayers who file a joint tax return with their spouse, and for taxpayers who file as a “Surviving Spouse,” the standard deduction has increased to $24,000. For taxpayers who file as “Head of Household,” the standard deduction has increased to $18,000.
In addition to the standard deduction, taxpayers who are age 65 or older, blind, or disabled may still deduct an additional $1,600 if they are single or an additional $1,300 for each taxpayer if they are married.
It is important to note that under the new law, the personal exemption, which previously could be deducted in addition to the standard deduction, has been repealed.
For further clarification, when it comes to filing one’s tax returns for 2018, taxpayers have two options: they may choose to take the standard deduction or they may itemize their deductions. The standard deduction is a set amount that taxpayers may choose to deduct from their total gross income each year. This is the simplest way to file one’s taxes; however, the standard deduction does not take any of the taxpayers’ expenditures for the year into consideration. Itemizing allows taxpayers to calculate their total gross income for the year and then subtract eligible deductions – such as mortgage interest, state and local taxes, charitable contributions, etc. – which can exceed the set standard deduction.
Previously, choosing to itemize could save taxpayers money; although, the paperwork involved could make doing so a difficult task. Now that the standard deduction has nearly doubled, more taxpayers are likely to choose the standard deduction over itemizing. Taxpayers should consult with their tax advisor to determine whether the standard deduction is the best option for them.

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