What is the standard deduction? Q.What is the standard deduction? A.The standard deduction reduces a taxpayer’s taxable income. It ensures that only households with income above certain thresholds will owe any income tax. Read more about What is the standard deduction?
How did the TCJA change taxes of families with children? Q.How did the TCJA change taxes of families with children? A.The 2017 Tax Cuts and Jobs Act increased the standard deduction, eliminated personal exemptions, doubled the maximum child tax credit (CTC) from $1,000 to $2,000 per child under age 17, and added a $500 nonrefundable credit for children ineligible for the $2,000 credit. The legislation also changed how the earned income tax credit (EITC) is indexed, causing the credit to grow more slowly over time. Despite these changes, overall tax benefits for families with children remained roughly the same as under prior law. The changes not related to the EITC expire after 2025. Read more about How did the TCJA change taxes of families with children?
What are itemized deductions and who claims them? Q.What are itemized deductions and who claims them? A.Taxpayers can choose to itemize deductions on their tax returns in lieu of claiming a standard deduction. Prior to 2018, around 30 percent of taxpayers, mostly those with higher incomes, chose to itemize, but increases in the standard deduction and limits to itemized deductions starting in 2018 have greatly reduced the number of itemizers. Read more about What are itemized deductions and who claims them?