We have been told of a tax cut, and the higher standard deduction which will falls more under the category of a simplification. For sure, the standard deduction has roughly doubled for all filers, but personal exemptions have been eliminated for all taxpayers.
For example, a single filer would have been entitled to a $6,500 standard deduction and a $4,150 personal exemption in 2018, for a total of $10,650 in income exclusions. Under the new tax plan, they would just get a $12,000 standard deduction. Is it better? Yes. But it’s not really “doubled.” Another example of family with three children, under the old law they will be entitled to $20,250 of personal exemption and $12,700 of standard deduction if they do not itemize in total in income reduction will be of 33,950. Moreover, under the new law the personal exemption is suspended and 24,000 in standard deduction would be accounted for income exclusion. This family will definitely see the higher tax bill in 2018.