Another component of the new tax legislation is the removal of the personal exemption deduction. This deduction was $4,050 for every member of your family assuming taxpayer, spouse and children…certain other ones as well. With the increased standard deduction, they took away the deduction for personal exemptions. An example would be a deduction of $16,200 for 2 parents and 2 children.
Who does this really affect? Well, primarily taxpayers whose Adjusted Gross Income is less than $313,800 for married filing joint, $287,650 for heads of households, and $261,500 for single taxpayers. So this is a hit to the middle and lower class taxpayers. The doubling of the standard deduction will not help many of these people. The net result will be an increase in tax as a result of this change. Taxpayers whose AGI was in excess of the above amounts saw their personal exemption get limited or disallowed anyway, so they will not be affected to the degree that households with incomes below the previous limits.
If your Adjusted Gross Income is below the above amounts and your children are age 13 or older, you will really see the effect on your taxes for this deduction that is no longer available to you.
A Christmas Gift? I don’t think so.