While there is much to be debated, approved, voted and bantered before any final legislation is likely approved, there is one very interesting tax item we are keeping our eye on.
Major Increase in Standard Deduction
So far the GOP and the new president seem very strong proponents of a HUGE increase in the standard deduction. Currently the talk is $30k for joint filers. The current standard deduction is $12,600.
Digging deeper into the facts, a couple of probably outcomes may be seen:
- A married couple with no kids or dependants and negligible deductions really get a big break
- Larger families may actually come out worse as there is currently talk of eliminating standard deductions (think dependent kids)
- Itemization may be much less – this may be a goal of the new plan- with such a higher standard deduction, those on the cusp of deductions may not even be close anymore
We will keep our eyes on this one and update you as clarity occurs…..interesting though !
Have a Great “Less Taxing” Day!
John A. Kvale CFA, CFP