The GOP tax bill passed in 2017 made many changes to the nation's tax code, but one of the changes that impacts the most people was the increase to the standard deduction available to individuals, married couples, and heads of household.
The standard deduction available to these people in 2018 is as follows:
- Individuals and married people filing separately: $12,000
- Married couples filing jointly: $24,000
- Heads of household: $18,000
This is double the standard deduction for the previous year. What this means for many people is that if their income did not change much in 2018 vs the previous year, and they itemized their deductions in 2017, they may be better off taking the new standard deduction instead of itemizing their deductions.
Whether or not this is the case depends on whether or not they have more itemized deductions available to take in 2018, as well as other factors. If we are preparing your tax return, we will advise you on whether or not you should take the standard deduction or itemize deductions.