9 Things You Need to Know About the Republican Tax Overhaul
4. Personal exemptions eliminated
The Republican tax plan eliminates the ability for filers to claim personal exemptions. Personal exemptions for 2017 were valued at $4,050 per taxpayer, spouse or qualifying dependent.
According to CNBC, the elimination of the exemptions will impact multi-child families and single-parent families the most.
"Doubling the standard deduction is nice if you're a married couple with no kids,"Stan Veliotis, director of the Center for Professional Accounting Practices at Fordham University, told CNBC. "But bigger families won't get as much of a benefit on that."
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The Tax Policy Center reports that under the current law, a married couple with an adjusted gross income of $75,000 and two kids under 17 would have a total of $16,600 in personal exemptions.
"When including the standard deduction of $13,000 for married-filing-jointly, the filers' taxable income falls by $29,600, according to case studies from the Tax Policy Center," a CNBC report states. "Meanwhile, under the new tax bill, this same couple would have only the standard deduction of $24,000 for joint filers who are married."
When the new $2,000 child tax credit is added, the Tax Policy Center finds that the couple with two kids earning $75,000 could see a tax decrease of about $2,119 in their taxes.
However, Elaine Maag, senior research associate at the Tax Policy Center, told the Washington Post that the new tax plan would not be so beneficial for a married couple with an income under 30,000 and two college-age children over 17.
"The pain point could be for families with dependent children 17 to 24 years old," The Washington Post reports. "The math works out less kindly for them. No one gets personal exemptions, and their children no longer qualify for a child tax credit, but the new family tax credit is much smaller."
Although there is a new $500 family tax credit for dependents who are too old to qualify for the child tax credit, the Tax Policy Center analysis finds that a single mother with two children and a married couple with two children that earn only $36,976 per year might actually see their taxes increase.
