“a significant number of people with a not-so-high income will pay more. Singles and retirees are particularly likely to end up owing an additional $1000-3000 on incomes under $100,000.”
Really? Please explain how doubling the standard deduction and increasing the child exemption increases taxes?
Only some filers who itemize should pay more -as in people earning >$250k who itemize the bejeezus out of their returns.
Hardly anyone below 100,000 will itemize because the standard deduction is doubling.
Personally, I’m due a $4,600 deduction. IOW a $4600 pay raise.
I am a single retiree. In the 2017 tax year, on an income of $80K, I took $16K in itemized deductions and a $4K personal allowance. That’s $20K. With a $12K standard deduction, my taxable income will increase by $8K, and my tax will increase by about $1700.
Well, there’s your explanation. How many people are like that? More than you would think.
“Hardly anyone below 100,000 will itemize because the standard deduction is doubling.”
Just that factor, even if we don’t get a reduction in taxes is worth it re not itemizing our deductions.
So far all of our younger/hard working adults in our family/both sides, will get refunds except for one family. He and his wife make a lot of money and purposefully use/make less monthly deductions to over pay their withholding to get a refund which they treat as a bonus. They maximize their 401k’s, IRA’s and kids college funds and have enough left over to do the higher withholding overpay due to the low interest rates/cds.
My wife and I plan to get a reverse mortgage to pay off our first and second and then take the standard deduction.
According to our CPA, that will not only increase our monthly net $’s a significant $ amount. It will enable us to get a pretty good refund with the new rates. Also, we will not need him any more and will save us about $500 in his fees each year besides eliminating the paper collection hassle.
A couple of years ago Congress changed the law such that money taken from your IRA but paid directly to a charity from your IRA as a charitable donation does not count as taxable income. This had an effect similar to itemizing your charitable donations (but not your state taxes) without forfeiting your access to the standard deduction.Is that provision unchanged? The increase in the standard deduction makes exploitation of that provision more certain to be valuable - if it is still available in 2018.