With the new Tax Cuts and Jobs Act, there have been some adjustments to the U.S tax code. Although most of the numbers will change over the years, there have been major updates on specific areas of the tax code. Especially on the standard deduction. From 2018 through 2025 tax years, the standard deduction has been doubled from $6,350 for 2017 to $12,000 for 2018 and for the 2019 tax year, the standard deduction amount is standing at $12,200. Before the change, around 60% of the taxpayers were taking the standard deduction as the main source to reduce their taxable incomes, it’s now as high as 90%.
This is great news since the taxpayers are now able to fall into smaller tax brackets but some are worried that the government is not collecting enough taxes. This might not do any harm to us at the moment but it can drastically in the future Even though there are many theories and assumptions going around in this subject, it’s hard to say if this is a good thing or not and even many people speculate that government is overcharging its taxpayers to get more but that’s another topic to discuss.
On the bright side, most of the American taxpayers will have a break from paying too much taxes. Especially low and middle-income individuals and families. Another great way to reduce your taxable income is to take all the other deductions you are eligible to take. Many people assume that taking the standard deduction closes all the doors for any other deductions to come but that is the furthest thing from the truth. There are some deductions you still can take even if you don’t itemize. Click the link below to visit our article on this subject.