Level 7

Tax reform

The current Tax reform does not lower taxes for all.  Instead it simply shuffles the the tax burden.  For some, it means a higher tax burden for others not so much.  A taxpayer filing a joint return with 5 dependents, who does not itemize likely sees an increase in taxable income from 2017.  Why?  Because in 2017 each dependent was worth $4050 in exemptions or in this case $28,350...then add to that the Standard Deduction for Married Filing Joint  ($12,700)  total deductions = $41,050.  This year it's a straight up $24,000.

 

But wait there's more!

 

What about the married couple with no dependents.  Last year they got $8,100 for the two exemptions add the Standard Deduction ($12,700) there total deductions are $20,800 for 2017.  During the current year their situation improves because the Standard Deduction is $24,000.

 

The Tax Man giveth and taketh away....