What is happening to my exemptions?
February 6, 2018
What’s going on with my exemptions under the Tax Cuts and Jobs Act (TCJA)?
Under the former law, which of course applies to the tax returns being filed for 2017, taxpayers can claim a personal exemption for themselves, their spouse (if filing jointly) and each qualifying child or relative. Each of these exemptions allowed taxpayers to reduce their taxable income by $4,050.
As an example, if you are married filing jointly with your spouse and have two children, you would be allowed to reduce your taxable income by $16,200. Pretty nice, huh?
Well, with the TCJA this exemption is completely removed until 2025. Nobody gets it, period.
While it sounds completely terrible on the surface, the Act did increase the standard deduction which will effect a lot of taxpayers, but certainly not all. More about the changes to Standard and Itemized deductions coming up in a couple of weeks!