Why Trump's Doubled Standard Deduction Won't Do You As Much Good As You Think
With the release of the latest framework for tax reform from congressional Republicans and the Trump administration, taxpayers are finally starting to get a better sense of how the federal government will respond to their call for a simpler, fairer tax system. Key planks of the proposal, such as the decline in corporate tax rates and the reduction in the number of tax brackets, have gotten plenty of attention for policy makers. Yet for most individual taxpayers, the proposal's plan to nearly double the standard deduction is one of its most attractive features.
Most taxpayers already use the standard deduction, saving themselves the trouble of having to itemize deductions that in many cases would turn out to be less than the standard deduction anyway. A higher standard deduction will allow even more people to use this simplified way of calculating their taxable income. However, the elimination of certain other tax benefits is likely to water down the favorable impact of an increased standard deduction. Two things in particular could detract from the measure's positive impact: the disappearance of personal exemptions and the elimination of many itemized deductions.
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Source: Fool.com
