{"id":36540,"date":"2018-10-24T04:15:25","date_gmt":"2018-10-24T09:15:25","guid":{"rendered":"https:\/\/www.hrblock.com\/tax-center\/?p=36540"},"modified":"2022-08-10T10:40:01","modified_gmt":"2022-08-10T15:40:01","slug":"new-standard-deduction-eliminated-exemptions","status":"publish","type":"post","link":"https:\/\/www.hrblock.com\/tax-center\/irs\/tax-reform\/new-standard-deduction-eliminated-exemptions\/","title":{"rendered":"Tax Reform and the Standard Deduction \u2013 What Does It Mean to You?"},"content":{"rendered":"<p><em>Editor\u2019s Note: This article was originally published on April 9, 2018.<\/em><\/p>\n<p>Under the <a href=\"https:\/\/www.hrblock.com\/tax-center\/irs\/tax-reform\/tax-cuts-and-jobs-act\/\">Tax Cuts and Jobs Act<\/a> (TCJA), the new standard deductions are nearly double the previous amounts. Additionally, tax reform has eliminated exemptions that taxpayers claim for themselves and their dependents. The way that these changes affect taxpayers depends on their specific tax situation.<\/p>\n<p>While the new higher standard deduction and removal of dependent and personal exemptions are two major changes of tax reform, these alone won\u2019t necessarily determine whether you\u2019ll pay more or less in taxes. The TCJA also changed tax brackets, rates, and many other provisions that will affect each person differently.<\/p>\n<h2><strong>New Standard Deduction<\/strong><strong> \u2013 2018\u00a0and Beyond<\/strong><\/h2>\n<p>Each year, taxpayers can pick the better option for their situation: the standard deduction or\u00a0<a href=\"https:\/\/www.hrblock.com\/tax-center\/irs\/tax-reform\/3-changes-itemized-deductions-tax-reform-bill\/\">itemized deductions<\/a>.<\/p>\n<p>The standard deduction is generally a fixed dollar amount, adjusted each year for inflation, that reduces the taxpayer\u2019s taxable income. Here are some details:<\/p>\n<ul>\n<li>The value of the deduction depends mostly on the taxpayer\u2019s filing status. Elderly or blind taxpayers can claim an additional amount.<\/li>\n<li>Typically, taxpayers itemize deductions if their deductions total more than the standard deduction. Itemized deductions include expenses such as mortgage interest, state and local taxes, medical expenses, and more.<\/li>\n<li>The TCJA nearly doubles the existing standard deduction amounts for tax years 2018\u20132025. Because the TCJA has changed many tax provisions, taxpayers may or may not benefit from the higher standard deduction. It depends on how each taxpayer is affected by the other provisions in this tax bill.<\/li>\n<li>The new higher standard deduction from tax reform means that many taxpayers who previously itemized will now choose the standard deduction. Taxpayers whose itemized deductions are higher than the new standard deduction will likely continue to itemize.<\/li>\n<\/ul>\n<p><strong>Prior to TCJA,<\/strong> the standard deductions for tax year 2018 were slated to be:<\/p>\n<ul>\n<li>$13,000 \u2013 Married Filing Joint or Surviving Spouse<\/li>\n<li>$9,550 \u2013 Head of Household<\/li>\n<li>$6,500 \u2013 Married Filing Separate or Single filer<\/li>\n<\/ul>\n<p><strong>For years 2018-2025,<\/strong> the new standard deductions will be:<\/p>\n<ul>\n<li>$24,000 for Married Filing Joint or Surviving Spouse<\/li>\n<li>$18,000 for Head of Household<\/li>\n<li>$12,000 for Married Filing Separate or any Single filer<\/li>\n<\/ul>\n<p>The additional standard deduction for the elderly and the blind is not changed.<\/p>\n<h2><strong>Cost of Living Adjustments<\/strong><\/h2>\n<p>The TCJA also changed inflation adjustments for cost of living. Cost of living adjustments will likely increase at a more gradual rate under the new measure. For further information on the new cost of living adjustment, please see the\u00a0<a href=\"https:\/\/www.bls.gov\/\">Bureau of Labor Statistics.<\/a><\/p>\n<h2><strong>After Tax Reform: Personal Exemptions and Dependent Exemptions <\/strong><\/h2>\n<p>Before we outline what\u2019s changed with dependent and personal exemptions due to tax reform, let\u2019s review the prior rules. Before the TCJA, taxpayers could claim an exemption for themselves, their spouse, and their dependents (if eligible). Each exemption lowered taxable income by $4,050 under pre-TCJA (2017) law.<\/p>\n<p>The TCJA has suspended all personal and dependent exemptions for tax years 2018-2025. New tax provisions, including a higher standard deduction, may or may not make up for the removal of personal and dependent exemptions, as taxpayers\u2019 situations vary.<\/p>\n<p>To estimate your taxes, visit our tax refund and <a href=\"https:\/\/www.hrblock.com\/tax-calculator\/\">income calculator<\/a>.<\/p>\n<h2><strong>Return Filing Requirements for the Standard Deduction Under Tax Reform<\/strong><\/h2>\n<p>Under the pre-TCJA tax code in effect for 2017, taxpayers were required to file a return if their income reached the amount of the standard deduction for their filing status, plus the personal exemption amount of $4,050 (two personal exemptions for joint filers). Under the TCJA, taxpayers are required to file if their income reaches the new increased standard deduction.<\/p>\n<h2>Wondering What the Standard Deduction and Tax Reform Means for Your 2018 Taxes?<\/h2>\n<p>The Tax Cuts and Jobs Act contains hundreds of changes to tax law and the new standard deduction is just one of them. You can learn more in our <a href=\"https:\/\/www.hrblock.com\/tax-center\/tax-reform\/\">Tax Reform Center<\/a>. Or, if you\u2019re looking for tailored help, <a href=\"https:\/\/www.hrblock.com\/tax-offices\/local-offices\/#!\/en\/office-locator\/\">schedule an appointment<\/a> with one of our knowledgeable Tax Pros.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Editor\u2019s Note: This article was originally published on April 9, 2018. Under the Tax Cuts and Jobs Act (TCJA), the new standard deductions are nearly double the previous amounts. Additionally, tax reform has eliminated exemptions that taxpayers claim for themselves and their dependents. The way that these changes affect taxpayers depends on their specific tax [&hellip;]<\/p>\n","protected":false},"author":646,"featured_media":36541,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[25,13040],"tags":[],"class_list":["post-36540","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-irs","category-tax-reform"],"acf":[],"yoast_head":"<title>Tax Reform and the Standard Deduction | H&amp;R Block<\/title>\n<meta name=\"description\" content=\"Tax reform increased the standard deduction starting in tax year 2018. 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