Exemption Planning

The Tax Cuts and Jobs Act eliminated the deduction for personal and dependent exemptions. The new tax law almost doubled the previous standard deduction amounts to $24,000 for married filing jointly and $12,000 for single filers, indexed for inflation. In 2019 the standard deduction amounts are $24,400 for married filing jointly and $12,000 for single filers. These changes expire at the end of 2025.

As part of the new tax law eliminating dependent exemptions for 2018 through 2025, taxpayers will no longer be able to claim their parent as a dependent. However, the Tax Cuts and Jobs Act does allow for a new $500 nonrefundable credit for dependents who do not qualify for the child tax credit. Taxpayers can claim this for children too old for the child tax credit and for non-child dependents.