Concerning the new standard deduction...

[LuckyCharms]

I'm sure that a lot of you realize this, but the doubling of the standard deduction is not really any great shakes to those that use the standard, because the elimination of the personal exemptions eats up a lot of that benefit.

[guillaumeb]

1. And, for families with more than 1 child,

the portion of income that will be subject to taxes actually rises because of that elimination.

Many of these Trump voters will realize this, but only in 2019, which will help the Democrats in 2020.

[LuckyCharms]

2. Would you please expand on this a bit?

I'm trying to get my head around all of this. Thank you.

[guillaumeb]

3. Certainly.

In 2016, the standard exemption for a married couple was $12,600.
The personal exemption was $4,050 per person. So, for a family of 3, that becomes a combined exemption of $24,750.

So under the new law, my former $24,750 drops to $24,000. That translates into an additional $750 in my income being subject to taxes.

For a family of 4 or more, add an additional $4,050 for each qualified dependent.

Edited to add: Per Post #7, My first line should ahve read "standard deduction" and not "standard exemption".

[LuckyCharms]

4. Thank you, but I thought the exemptions for dependents...

still remained and that it was only the personal exemptions that were eliminated?

If that is the case (I could be wrong), then the total exemption under the new plan would be $24,000+4,050=$28,050.

In summary, I guess my question is...were all exemptions eliminated (including dependents), or just the personal exemptions for you and your spouse? Thanks!

[LuckyCharms]

5. Oh, crap. I think you are right. See link.

http://money.cnn.com/2017/12/15/news/economy/gop-tax-plan-details/index.html

[guillaumeb]

6. Yes, I read that earlier.

But 2018 returns will be filed in 2019, so the GOP probably hopes that their voters will not realize this.

Imagine a Trump voter will 3 children discovering that their family will be taxed on an additional $12,150 in income. Surprise, Trump families. Enjoy the less money that you will see when you calculate your taxes.

[LuckyCharms]

8. Thanks for your help...I learned something today.

Up until now, I thought the dependent exemptions remained.

This is like giving someone $10 with one hand, and then taking away $15 with the other.

[marybourg]

7. For clarity, change the word "exemption" in the first sentence

to "deduction".

[guillaumeb]

9. True. I will do so. Thank you.