Since the Tax Cuts and Jobs Act (TCJA) has made some notable changes for the 2018 tax year and beyond until 2025, taxpayers are wondering about the standard deduction amount for 2019 and 2020.
The standard deduction amount jumped from $6,350 in 2017 to $12,000 for 2018. Although this sounds cool and all, the whole purpose of this change is not to make taxpayers less tax, a part of it does but the main reason for this was to simplify the U.S. tax code. The standard deduction amount for the tax year of 2019 (taxes due April 2020) is currently at $12,200 which is only $200 more from the previous year.
Instead of taking a moderate amount of standard deduction and supplying with personal exemptions and deductions that are literally available for everyone, TCJA has eliminated those deductions and the personal exemptions while increasing the standard deduction amount. Whether if this is a good thing or not, we’ve seen a huge increase in the number of people taking the standard deduction. It jumped from 60% to as high as 90% for 2018 alone and experts are still expecting an increase even though it stays at 90%.
However, when we compare this year and the previous year in terms of the amount of tax paid to Uncle Sam, there aren’t any significant changes at all. The changes almost seem like it was aimed to relieve the IRS from all that extra paperwork.