[H. Rick Bamman – email@example.com]
The middle class
The plan has been touted as the ideal way to decrease the tax burden for middle-class Americans, in part because of the doubled standard deduction. Married couples were able to deduct $12,600 from their taxable income last year using the standard deduction. A single person could deduct half of that. Under the new proposal, those allowable deduction amounts would nearly double, allowing married couples to deduct $24,000 and individuals to deduct $12,000.
About 70 percent of American families take that standard deduction in lieu of itemizing things such as state and local taxes, charitable donations and mortgage interest, Piershale said.
“That means their itemized items aren’t greater than the standard deduction,” he said. “Even with the standard deduction at its current level, it is still a better deal for people.”
A piece of the proposal eliminates personal exemptions, which could hurt some families, Piershale said.
For example, a family of four right now is entitled to an automatic $16,200 exemption through personal exemptions. Add in the standard deduction, and that family is looking at sheltering about $29,000 from taxes. If personal exemptions go away, the family will be left with its standard deduction of $24,000 – $5,000 less than it originally was able to deduct, Piershale said.