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Hi,

In all the hoopla and information I see streaming in the media; I see no mention of whether the Age 65 deduction ($1550) will still be on the books.

Does anyone know if that has been kept?

Thanks,

JimA
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In all the hoopla and information I see streaming in the media; I see no mention of whether the Age 65 deduction ($1550) will still be on the books.

Does anyone know if that has been kept?


My understanding is that MFJ taxpayers over 65, blind or disabled will each be able to add $1300 to their standard deduction. Single taxpayers will be able to add $1600. If you itemize deductions, and your deductions are higher than the standard deduction plus the adder, you won't get any additional benefit.

That's assuming that it passes as currently written......

AJ
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Thanks AJ,

So, as a single and not itemizing, I will end up with $12,000 plus $1,600 for a total of $13,600.

And, of course, all of that reverts to the current numbers in 2025 or so. I wonder if the Exemption returns in 2025 when the deductions revert?

JimA
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And, of course, all of that reverts to the current numbers in 2025 or so. I wonder if the Exemption returns in 2025 when the deductions revert?

That would be the logical thing, but since nothing that Congress sets the rules for is logical, I'm not sure I would count on it. ;-) Besides, Congress still has several years to mess with things.....

AJ
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Hi JimA

Yes, and for a couple both 65 and older, this will be a total $26,600 standard deduction.

This creates an interesting situation for many age 70.5 and older, and Required Minimum Distributions. If their itemized deductions do not reach $26,600, and I suspect most will not, they will not be able to individually deduct charitable contributions directly, but can do so indirectly by making the contribution through a Qualified Charitable Distribution from their Traditional IRA. That is, directing the IRA to make a direct distribution to the charity of choice which will mean it is not included in the household's ordinary income for the year.

BruceM
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<My understanding is that MFJ taxpayers over 65, blind or disabled will each be able to add $1300 to their standard deduction.>


I just want to clarify this point since very few things about taxes are ever as simple as they may sound on the surface.

Is one's official filing age determined by your age at the end of the tax year? Put another way, if one turns 65 sometime during 2018, are they considered to be 65 for the entire tax year?


BG
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Is one's official filing age determined by your age at the end of the tax year? Put another way, if one turns 65 sometime during 2018, are they considered to be 65 for the entire tax year?

Actually, for 2018, if you turn 65 on or before Jan 1, 2019, you are considered to be 65 for the filing year. See line 39a of the 2016 Form 1040 https://www.irs.gov/pub/irs-pdf/f1040.pdf where it says to check if you were born before Jan 2, 1952.

AJ
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Is one's official filing age determined by your age at the end of the tax year? Put another way, if one turns 65 sometime during 2018, are they considered to be 65 for the entire tax year?

And if your very pregnant wife might deliver New Year's Eve or be the first on New Year's Day, she should hurry it up and do it this year, and the new kid counts as a deduction for the whole year. Having the first baby of the new year costs you a year's deduction.

(Unless the regulations have changed since I learned this.)
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Having the first baby of the new year costs you a year's deduction.
~~~~~~~~~~~~~

Mrs Fan's DOB is Dec 30. Her father always joked that the tax exemption enabled them to buy a new washing machine.
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My mother walked around our block several times with my dad's help. She went into labor, dad drove fast to St. Vincent's hospital and I was born at 9:19 PM December 31

BruceM
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