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Doing Your Taxes 2018

Updated on December 20, 2018
jackclee lm profile image

Jack is currently a volunteer at the Westchester County Archives. Before retiring, he worked at IBM for over 28 years.

Introduction

Tax Cuts and Jobs Act of 2017, or the TCJA will reduce most people’s taxes and simplify the filing process. This article provide a summary of the changes.

- Dec. 2018

Details...

The main changes for individual filings are the standard deduction amounts. To simplify most people’s tax filings, the government decided to double the standard deductions for everyone. This will accomplish three goals. First, it will save most people some money. Depending on your tax bracket, you can expect to see $1500-2500 savings in overall taxes. Second, it will make it more fair such that people who rent instead of owning their own houses, will have some deductions added. Third, it will simplify the tax forms. Most people will no longer need to itemize their deductions.

This is huge. It means, most people, can file using the short form. It will save on tax preparation charges.

The standard deduction nearly doubles, from $12,700 to $24,000 for married couples. For single filers, the standard deduction will increase from $6,350 to $12,000. About 70% of families choose the standard deduction rather than itemized deductions; this could rise to over 84% if doubled. The personal exemption is eliminated—this was a deduction of $4,050 per taxpayer and dependent, unless it is in an estate or trust.

Winners and Losers

Winners are:

  • The American people
  • Small businesses

Losers:

  • Tax Accountants
  • H&R Block
  • Washington Bureaucrats

Donation To Charities

It is imperative that each person continue to donate to their favorite charities. Just because you no longer need to itemize, you should still donate. Those funds will help many people in need.


How Much Does the IRS Take In?

Our National Debt 2008-2018 as % Of GDP

Summary

The tax reform bill was long over due. It took 30 years since the last major reform. Our tax system is complex, antiquated, unfair and full of loop holes.

We needed a simplified tax system that is fair and easy to file. Thanks to President Trump and the GOP fulfilling one of his campaign promises, we have a new tax reform bill.

A Non Scientific Poll

How much tax savings did you realized in 2018?

See results

© 2018 Jack Lee

Comments

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    • Eurofile profile image

      Liz Westwood 

      8 months ago from UK

      Tax thresholds have steadily risen in the UK over recent years, taking some out of the tax system altogether.

    • jackclee lm profile imageAUTHOR

      Jack Lee 

      8 months ago from Yorktown NY

      Liz, as you know, we do have a progressive tax system. However, it is to the point where halve of our citizens don’t pay any federal income tax and in fact some gets a tax credit.

      It is highly unfair. I would much prefer a flat tax or even a consumption tax.

    • Eurofile profile image

      Liz Westwood 

      8 months ago from UK

      I find it interesting seeing how the US tax system workd.

    working

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