New Standard Deduction versus Itemized Deductions

New Standard Deduction versus Itemized Deductions

For 2018, joint filers can enjoy a standard deduction of $24,000 (versus $12,700 for 2017). The new standard deduction for heads of household is $18,000, and single taxpayers (including married taxpayers filing separately) can claim a standard deduction of $12,000. However, the TCJA suspends the deduction for personal exemptions.

If you typically claim the standard deduction (as opposed to itemizing deductions), chances are your tax bill will decrease for 2018. Although personal exemption deductions are no longer available, a larger standard deduction, combined with lower tax rates and an increased child tax credit, may result in less taxes. However, if you usually itemize deductions, the larger standard deduction may change this.

Also, the TCJA eliminates or limits many of the itemized deductions. We are available to analyze your particular tax situation to determine if you will pay more or less under the TCJA.
Note: Depending on your circumstances, we may need to adjust your estimated quarterly tax payments. Also, this is a good time to check if you’re on track to have the right amount of federal income tax withheld from your paychecks in 2018. You can correct any discrepancies by turning in a new Form W-4 to your employer.

DeHoek & Company, PLLC

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