29 Jan What’s changed with the standard deduction for seniors?
Q. Has the federal tax deduction for taxpayers who are 65 and over increased for 2018? What would be the deduction if one of the spouse is not 65 yet?
A. You’re talking about the standard deduction, which underwent big changes under the Tax Cuts and Jobs Act.
For a married taxpayer filing jointly, the basic standard deduction increased from $12,700 for 2017 to $24,000 for 2018, with an additional $1,300 increment for a spouse who has attained the age of 65, said Neil Becourtney, a certified public accountant and tax partner with CohnReznick in Eatontown.
“Therefore, if one spouse filing jointly is 65 or older, the standard deduction increases to $25,300, and if both spouses are 65 or older, the standard deduction increases to $26,600,” he said.
Becourtney said the standard deduction was increased to make up for the elimination and/or reduction of several itemized deductions. For instance, the Tax Cuts and Jobs Act eliminated miscellaneous itemized deductions such as unreimbursed employee business expenses and investment expenses, while limiting the deduction for state income taxes and real estate taxes to $10,000, he said.
“If a taxpayer’s itemized deductions exceed the standard deduction, then they should compare the tax that would result if they claimed their actual deductions, which are reported on Schedule A, to see which method provides the best tax result,” Becourtney said.
Also keep in mind the standard deduction is indexed each year for inflation. The Internal Revenue Service recently announced that for 2019, the basic standard deduction for joint filers has increased to $24,400, he said, while the additional standard deduction increment for being 65 years of age will remain at $1,300 for 2019.
Email your questions to moc.p1566152358leHye1566152358noMJN1566152358@ksA1566152358.