I'm a CPA with a small tax practice

[still_one]

33. That is not necessarily true. The elimination of the Personal exemptions, especially for those who

used to itemize deductions, along with the capping of the amount you can deduct for SIT and Property tax, plus the elimination of the interest rate deduction for equity lines of credit unless it is used for home improvement will impact those in the category you mentioned because those deduction eliminations will not only not make it feasible for those to itemize deduction this year, and take the standard deduction, and with the elimination of the personal exemption, many in that category will find they are paying significantly more tax than the previous year where they were able to itemize deductions.

The personal exemption was 4050 for single, and 8100 for married. The Standard Deduction for those not 65 is 12000 for single, and 24000 for married. With the elimination of the personal exemption, that effectively means the standard deduction beccomes 7950 for single, 12000 - 4050, and 15900 for married, 2400 - 8100.

Many are going to be surprised that the new tax tables do not offset that personal exemption loss enough, and find that they in fact will be paying more taxes then they did in the year they were able to itemize deductions.


For those that did not previously itmize deduction, they have the greatest probably to be paying less taxes, but again, with the elimination of the personal exemption, it is not going to be as much as they anticipated.

I agree with your analysis of those who have businesses, and charities will be hit hard, because those that used to itemize will likely reduce how much they used to contribute.

What may help offset the higher tax some will realize who used to itemize deductions is if their state does NOT follow the federal like most states had been doing. California is one such state. Those who itemized in 2017 will find they can still itemize in 2018, with NO CAP on certain itemized deductions, and interest on equity loans can still be deducted if they itemize at the state level in California, along with charitable contributions.

One needs to see if their state conforms to the new tax law or not. It does make doing the tax returns more complicated, but could save them a little if they fall into the category where they can no longer itemize their deductions when they used to be able to.