2023 Tax Calendar
VIEWpoint Issue 2 | 2022
Inflation Reduction Act: Highlights of Key Changes for You and Yo...
One of several key provisions included in the Tax Cuts and Jobs Act was the nearly doubled standard deduction for taxpayers. The amounts of new standard deduction, which went into effect on Jan. 1, 2018 and expires on Dec. 31, 2025, is as follows:
The Act retains the enhanced standard deduction for the blind and elderly that was already available. Additionally, the standard deduction amount will be indexed for inflation using C-CPI-U in tax years beginning after 2018.
The doubling of the standard deduction will effectively eliminate most individuals from claiming itemized deductions other than higher-income taxpayers.
For example, for the vast majority of married taxpayers filing jointly, the only itemized deductions available to them may include:
With fewer individuals claiming those deductions, this could have a broader impact on both real estate prices and charitable organizations despite retaining those two deductions, in modified form.
Additionally, the increase in the standard deduction should be considered in combination with the Act’s elimination of the deduction for the personal exemption. This elimination of the personal exemption will reduce the net benefit of the increase in the standard deduction for some taxpayers.
To learn more about how this new standard deduction may impact you directly, contact Doeren Mayhew’s tax advisors today.
Want to reach the author? Email Michael Weller or contact him at 248.244.3039. Michael Weller, JD is a Senior Tax Manager with Doeren Mayhew.
This publication is distributed for informational purposes only, with the understanding that Doeren Mayhew is not rendering legal, accounting, or other professional opinions on specific facts for matters, and, accordingly, assumes no liability whatsoever in connection with its use. Should the reader have any questions regarding any of the news articles, it is recommended that a Doeren Mayhew representative be contacted.
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