Losing the $4,050 Personal Exemption in 2018 But Doubling The Standard Deduction

49 comments

As part of the GOP tax reform bill to support President Trump’s tax reform agenda the Personal exemption is being fully eliminated in 2018. The $4,050 personal exemption in 2018 (which was unchanged from 2017) can be taken for yourself, your spouse, and your eligible dependents, will be scrapped. This could mean that single parents or families with lots of dependents could see a higher tax bill as a result, while higher income filers with no kids/dependents will likely fare much better due to their ineligibility for this exemption (income limits) under current law and from the other offsetting tax breaks in the new tax bill.


Several itemized deductions like SALT and alimony payments are also being cut back or eliminated entirely. This is supposed to be offset by the near doubling of the standard deduction, higher income 2018 tax bracket thresholds and increased Child Tax Credit (CTC). The idea is that by increasing the standard deduction and removing several deductions and the personal exemption, tax payers will not need to itemize for claiming extra deductions in their 2018-19 tax returns thereby making the tax filing process simpler and smoother.

Note that the personal exemption was not able to be permanently scrapped by the GOP due to Senate rules but will be suspended until 2025, unless extended by Congress then.

{ 49 comments… read them below or add one }

Age64 June 5

Will raising the Federal standard deduction affect real estate investors?

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anne kelly May 29

My clients had been asking for years “Will the Republicans Repeal Obamacare”, and my reply was always – “Obamacare is a TAX BILL, the Republicans will have a TAX issue if they pull Obamacare.”.. In addition I analyzed the CA & NY Minimum Wage increase laws and the ONLY one’s to make BANK on the minimum wage going to $15 are the politicians. The minimum wage increase will suffice to push people off Government subsidized Heallthcare, and the Government reaps in all the extra payroll Employer and employee taxes. This Republican Tax bill is the Equivalent of giving a five year old a lollypop in exchange for a $20 bill… We gave away Huge Tax Write-offs . In addition, while Standard Deductions Increased average $5,600 Filing Single and $11,300 Joint… The Republican Bill REMOVED the Personal Exemptions $4,100 Single , and $8,200 Joint. As Income increases over next few years we are losing losing losing . UNDERSTAND- The 200 lb Gorilla driving Healthcare Reform and a Major contributor to this TAX bill is Medicare Insolvency and the growing Medi-CAID population. We need to demand an AUDIT on where the 7.65% personal FICA TAX and 7.65% Matching Employer FICA taxes have been appropriated over the years for our pensions and Healthcare AC to be in such a mess. If a private entity did to our AC what Government has done, They would be behind bars. What fools we are !

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Tom May 4
Alex May 22

This article in your link is outdated (October 2017), and the new law was sign in December, 2017

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Barbara May 2

I have been claiming a single adult dependant who I support 100%. I make $21k/yr. I use the $4k I did get in my tax refund to buy his eyeglasses, clothes, etc. Will I lose that when I file for 2018?

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Jose Seda May 16

Yes, but you will get a standard deduction of $12,000 vs $6,350 that you got in 2017. If you are a W2 employee and have no other itemized expenses, you will be better off by roughly $225 vs 2017.

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Marie April 14

I am single, not blind, no dependents and 70. It appears the only deductions I will be able to take for 2018 is the standard deduction of 12000 plus the old over 65 single lady deduction of 1600.00 Total deduction of 13600.00.

I figured out my estimated taxes for 2018…and looks like I just caught a big mistake.
I gave myself the standard deduction of 12000.00 plus an additional 10000..I guess that was for looks. After going through the calculation again it seems all I can legally squeeze out for deductions is the 13600. What do you think??

Thank you Marie in VA

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robin May 3

Don’t forget to allow for the lowered federal withholding. The federal taxes withheld will be lower.

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Taxed till death March 29

We will definitely be screwed and paying more in taxes for 2018 tax year. the salt deduction plus mortgage interest is limited to 10 K we had been putting close to 25k on our schedule A itemized deductions to offset our income. the $24000 married filing jointly deduction will lose us a thousand in deduction there which we will start taking instead of using schedule a because of the 10,000 limit. In addition family of five is a $20,200 offset to our income with personal exemptions times 5. Therefore 22000 + 1000 is 23000 more income we will have to pay taxes on next year due to the loss of our personal exemption deduction. In addition our three boys just turned 17 which means we will lose the child tax credit of $2750 which we had used previously to offset our tax liability. I understand this is 3 x $1,000 tax credit but the worksheet reduces it to $2750. We make our money in rental property and had done well in the past although for the last two years we are realizing quite a substantial tax bill compared to years previously with all our depreciation. we make our money in rental property although for the last 2 years we are realizing quite a substantial tax bill compare 2 years previously with all our depreciation. In summary this new tax plan will cause us to pay taxes on an additional $23,000 in income. Please correct me if I am wrong.

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Kelly February 25

Ignoring the changes in tax brackets, strictly looking at just the personal exemption, it can negatively impact single filers without dependents, as well. For individual middle income earners on the low end like me with a mortgage who prefer to itemize, under the existing law my tax refund is greater because of the personal exemption. For simplicity sake, if I had currently have $11k in deductions + I claim the $4 k personal exemption, thus my taxable income is reduced by $15 k. Not having the option, I would have to use the double standard deduction instead at $12k, therefore losing $3k in income reductions. Basically, the main tax payers who will benefit by the this change in the new law are those who could not previously itemize or those whose both itemized deductions + personal exemption were less than than double the standard deduction.

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John March 29

Your logic does not register with me. Why would you take $15.000 in deductions when they are giving you $24,000.00 right off the top. I think I would take the $24k and file the simplest return possible. So, according to you comment above you would prefer $15k in deductions verses $24k in deductions. I would seriously reconsider, if I were you.

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Chad April 5

She clearly stated above that she is a single filer (not married filing jointly) which leaves her with a $12,000 standard deduction in 2018, as she stated. Her math is correct.
I also am not happy with the loss of the personal exemption and the removal of itemizing. I have a family of 6 and we always have more in itemized expenses (medical, charitable giving, mortgage interest, property tax and more) than our standard deduction was. This is going to be a net loss for us as well on those two items.
They did double the CTC which will create an additional $4,000 of credits, assuming I don’t get phased out again.
Overall, I think it will help many people but, as Kelly said, many will also end up paying more with the loss of certain deductions.

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Chad April 5

I should clarify something. I don’t mean the removal of itemizing but rather the discouragement of itemizing paired with the loss of personal exemptions. This will indeed hit many families like mine that have large itemizing deductions.

kay April 6

John, Kelly is a single filer and the standard deduction would be $12k not $24k.

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Jeff April 6

“…it can negatively impact single filers without dependents, as well.”

$24K is to a couple, and $12K is for individual. I would seriously reconsider my reply, if I were you.

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Carolyn April 6

John, I think Kelly said she was single so she would only get $12,000 not the $24,000 which is for Married filing jointly.

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Eric April 8

John, the $24K deduction is for filing jointly as a married couple.

Kelly is talking about single filers and is correct in stating the deduction is $12K. So, her logic is correct.

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John doesn't get it April 9

Single, 12K not 24

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charlie May 10

they are giving you $8000.00 over what the standard deduction is at this time. It will help out a lot of people who cannot itemize because they are single & no children. I am all for giving it a try to see if I get more than the $400.00 I usually get since I am retired.

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John February 22

The child tax credit is a credit off your taxes or a payment to your if you are at zero owed. The tax credit is not a deduction off of income. If you have two children you have lost their exemption. However $4000 will be deducted from your taxes or paid to you as a refund. For example imagine that you have two children and you would owe $4000 in taxes the two child tax credit will mean you owe nothing. If you have two children and you owe not taxes the IRS will send you a check for $4,000. I understand that this is confusing but remember a tax credit comes directly off of the line of taxes owed and can be paid back if it makes your taxes negative.

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n v lubbers February 3

IF YOU ITEMIZE YOUR DEDUCTIONS CAN YOU STILL CLAIM THE $4,050 personal exemption.

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Bob February 8

Did you read the article or know anything about the bill that was passed? The personal exemption was eliminated.

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John March 29

Yup, it were. The people making babies for a tax deduction might suffer.

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Grace April 24

You’re an idiot John. Making babies and supporting them until at least they’re 18 is spending more than $4050 per year. I bet if your parents didn’t have kids/kid like you, they will have more money saved back then.

charlie May 10

wow Grace, I bet your parents were bullies since you call people you do not know an idiot. there are people that do have children for the tax breaks.. I know some of them

Katie January 9

I’m at about 15,000 in itemized deductions including SALT (just under 10K), mortgage interest, donations. I do not have kids. Unless the tax brackets are going to wildly help me I don’t see how losing the personal exemption won’t leave me paying *more* in taxes in the end.

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russ January 27

Welcome to the republican way of life… you will pay more and with all the cuts in state programs look fo an increase in sales tax

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seppi February 28

Moron screw you

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John March 29

Read the law, you get a $24,000. dollar deduction. This yr. my standard deduction and personal exemption together was $23,300. Wife and I are both over 65. Because of our age our standard deduction was $2,500 more than a couple under 65. So a young couple with no children starting out would get $12,700 standard ded. plus $8,100 personal exemption for a total of $20,800. So in 2018 they are getting $3,200 more deducted from the AGI. Now, the people with a bunch of kids will probably get hurt by this a little. Maybe they want people to have less kids. he he

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SCOOT472 April 3

YOU KEEP MISSING KELLY’S POINT. SHE WONT RECIEVE THE 24K — SHE’S SINGLE WHICH DROPS HER DOWN TO THE 12K STANDARD. She had 11k in itemized prior plus her exemption. No kids for child tax credit. She will have more taxable income in 2018.

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kay April 6

John, there are NO personal exemption in 2018. AND not every one is a two (couple). Single individual, will have a standard deduction of $12K. that is it. So even if they itemized and have $15k in deductions, that is $3k more than standard so they will take the itemized number. However, since there is NO $4k (ish) personal exemption, they will pay taxes on $4k more of their income. If the exemption were still in place, they would have reduced their taxable income by the $3k above standard deduction, plus the $4k exemption, for a total of $7k which is clearly more than the $3k reduction per the new law.

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John doesn't get it April 9

You read it

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robin May 3

Don’t forget to allow for the lowered federal tax withholding amount.

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Anthony Walker January 9

I can’t see how losing the exemption deduction and getting a 10K addditional allowance for the standard deduction will help anyone but the 2 person family. If they itemized they will get murdered with a straight loss of the number of exemptions allowed. a family of four would have to pay tax on $16,200 , how is that a tax break. If they have removed the exemption deduction it will suck for a lot of the middle class. I can see why the democrats say this law is crap but they agreed to it because it will kill Trump and the Republicans at the polls.

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Russ July 28

Sorry not 1 Demarcate, voted for this tax “cut” Republicans voted 51 to 49 for it because they suspended the filibuster rules requiring 60 votes… they are crooks no doubt

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Robert Simon January 8

The bottom line is no group should not have to subsidize large families. If u do not want to pay more in taxes stop having multiple children and be responsible
Nobody is stopping u from having a large family just no tax benefits for doing so

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Dana January 12

See this is the short sighted thinking that will end up hurting you more because of your immediate selfishness. Those children that you “don’t want to subsidize” now will end up paying taxes and subsidizing everyone else in the future. Your 1.2 children will add less to the economy than their 5. People are so focused on their tiny little tree that they miss the redwood forest. To be clear I’m talking in relation to the loss of the exemptions that is only giving a proportional amount of tax savings for the number of people you are supporting. This is the exact thing that will end up most hurting those that Trump claims to be representing. You have a family that typically itemizes up to $19,000 and has three kids. After the changes they will end up losing $11,200 in deductions. For having three kids. Wow, they didn’t plan that well *sarcasm*

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Alan February 16

I think you did the math wrong, above. The family that typically itemizes $19,000 will now get the standard deduction of $24,000, and increase of $5,000 in that area. They lose the three personal exemptions ($4050 X 3 = $12,150. So their net loss is: $12,150 – $5,000 = $7,150. Not nice, but not $11,200. Now how much of that is made up for with the revised brackets will vary from case to case.

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Satish March 4

Dana is right. They loose 5 personal exemptions. 2 parents +3 children.

John March 29

:Yup, they will lose about $15k in deductions. 5 X 4050 = 20250 + 19000 = 39250 -24000 = 15250.
Guess gov. wants to reduce family size.

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Pam April 2

Well said Dana.

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Sharon December 28

The current tax law states an individual can be claimed by the taxpayer if the taxpayer providers more than 50% of the individual’s support AND the individual earns less than the standard exemption amount ($4,050). What will the new amount to be able to claim an individual who resides with you and is supported over 50% by you?

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sestamibi December 26

Adolph, the loss of the personal exemption is offset by an increase in the child tax credit to $2000, so many of the single-parent families of which you speak should make out all right after all.

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Dana January 12

One parent with two dependents. The deductions for 2017 would be head of household $9,350 plus three exemptions of $4,050 each. Equals $21,500 in deductions. For 2018 they lose the exemptions and the standard would be $18,000. Add back $2,000 for the two kids (2017 $1,000, 2018 $2,000) and you still have a deduction loss of $1,500. On a 15% tax rate and that’s additional tax of about $200. This is a tax increase for everyone except those that are lower income with no dependents or income so high that they phase out of itemized anyways.

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jim February 6

While I’m not a fan of the tax bill because it will ultimately increase the deficit, you’re numbers are a bit off. The $2,000 that you added back for the two kids is a tax credit — not to be confused with a tax deduction. In your example, of a 15% tax rate, each $1,000 of tax credit is equal to approximately $6,666 additional tax deduction. You would actually have a tax deduction of $31,332 instead of $21,500.

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Lynn April 8

I’ve been calculating the differences as well and I see this new tax bill not a benefit but an increase in taxes in 2018 as well. Yes, I went down in the 12% tax bracket, I’ll file head of household with 2 dependents with the higher standard deduction increase for 2018 , BUT I lost my personal exemptions. Having the standard deduction increase and a tiny 3% decrease in fed taxes, and the increase of 400 child credit per child does not make up the personal exemption loss. And my understanding of the child credit is that we are only refunded up to 1400, not 2000 per child? That is not totally clear to me, regardless, I see this meaning I pay more which sucks but great for the rich.

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Racq January 22

Unless that said child is under the age of 17, there is no benefit. 17 is usually 11th grade. That is not “making out all right”.

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Adolph December 21

With so many single parent families today, the chance that they might be paying a higher tax bill hardly seems to be a good thing. With the hoops that many jump through to make ends meet, it doesn’t seem
reasonable that to “make it easier to file” would be a choice made if it meant higher taxes. A strong family
has always been the underpinning of a strong country, yet this does not seem to help many families. Considering the falling birth rate, large families are an asset to the country.

“This could mean that single parents or families with lots of dependents could see a higher tax bill as a result, while higher income filers with no kids/dependents will likely fare much better due to their ineligibility for this exemption (income limits) under current law and from the other offsetting tax breaks in the new tax bill.

This part of the bill is a big mistake if I understand what has been described in the paragraph. I hope there
is some way that these families have some way to work around that increase.

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Brian December 20

Considering that currently about 72% of taxpayers file using the standard deduction, the near-doubling of the standard deduction, adjustments to the tax brackets, and doubling of the child tax credits in the GOP proposal will benefit many of that remaining 28% who do currently itemize. We’ve actually entered the numbers to see how it turns out for specific taxpayers — It’s difficult to come to any conclusion about the impact to a taxpayer without actually entering the data and seeing how it calculates out.

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