2018 was the year of a lot of lasts in the tax world. It’s the end of a lot of allowable itemized deductions, many credits, and more importantly for our concerns it’s the end of exemptions.
So Can I Claim My Kids This Year?
If you’re reading this in 2018 and you’re preparing your 2017 federal income tax return, then yes, you can still claim your children and anyone else that qualifies as your dependent for an exemption.
But this is the last year for that.
In 2019, not only can you not claim your children or dependent family members, you won’t even be allowed to claim yourself to receive an exemption.
See, claiming someone gives you an exemption. This amounts to in 2018 $4050 off of your taxable income to help decrease the amount of tax you pay.
The new tax law taking effect in 2019 erases your ability to claim any exemptions, dependency or personal.
How Can They Do That? I Thought This Was a Tax Cut!
It’s meant to be a tax cut. But that doesn’t mean it will be for everyone. The original concern of the tax bill was tax simplification, not tax cuts.
They’ve removed the exemption amounts from claiming dependents and yourself.
This was offset by increasing the standard deduction to $12,000, almost doubling it.
So I Am Still Getting A Tax Cut?
Again, there’s winners and losers any time the tax law is changed. Those with 1 or 2 children will probably break even when all is said and done.
Those with significantly more than 2 children (say a single parent with 8 children will likely not like the look of his or her 2018 taxes due bill).
What do you think? Have you looked over how you will be affected by the new tax law changes and is it more or less favorable than before?
The information on this page is not meant to constitute financial advice. For information concerning your specific situation, please contact your local financial advisor.