• Posted By J. RENO
    Wednesday, December 06 2017 at 3:05 PM
    My daughter and her husband have 3 children. They will lose $20,500 (4100 x 5) of exemptions, and pick up $12,000 in standard deduction. One child is 17. The increased child credit will not make up for losing the exemption for this child. Please tell me how they will benefit. Why does no one writing about the new proposals ever consider that there are couples making $80,000 who not benefit?
  • Posted By michohara
    Wednesday, December 06 2017 at 11:15 AM
    Some misinformation here. First, the child tax credit is refundable up to $1,100, which is greater than current law. ca@fma, you are right that the Senate tax bill's increased child tax credit is essentially a wash for the loss in exemption for those in the 25% tax bracket but a significant gain for those in the 15% bracket. Also, the standard deduction is doubled, which means even fewer people will itemize (30% currently) and thus more will reap even greater tax relief.
  • Posted By wilki
    Wednesday, December 06 2017 at 10:50 AM
    If the ability to specifically identify securities is eliminated, it will not prevent a taxpayer from donating or selling low-basis stock. The low-basis stock will simply need to be in a different account from the high-basis stock. Section 1012 states that basis of property is determined on an account by account basis.
  • Posted By ca@fma
    Wednesday, December 06 2017 at 10:41 AM
    The increase in the standard deduction doesn't do much more than offset the loss of the exemptions, and that is for MFJ with no dependents. So at that point the couple loses virtually all of their itemized deductions unless (whereas before they would get their itemized deductions plus their exemptions). If they have children under 17, the increase in the child tax credit doesn't do much more than offset the loss of exemption as well (House bill offsets it at a 15% rate, Senate at 25% rate).
  • Posted By duboff
    Wednesday, December 06 2017 at 9:30 AM
    In response to RJSKAL: the point was that personal exemptions are eliminated so low income families with many children will lose the benefit of those dependents, but the upside is that they will potentially get a higher Child Tax Credit. Current law would allow for some portion of the Child Tax Credit to be refundable. However the Credit under the Senate Bill would not be refundable. Therefore, those who have tax to pay will benefit and those who have no tax to pay will not benefit.
  • Posted By rjskal
    Wednesday, December 06 2017 at 9:07 AM
    Not following the logic here regarding the exemptions...“But my understanding is it’s not refundable so if you have no tax at all, which is highly likely, then you don’t get any credit. So a taxpayer who makes a lot of money will get a Child Care Credit, whereas a taxpayer who doesn’t may not get anything as a result of some of these changes.” If the taxpayer doesn't have any tax, an exemption would be of no value to them. They're in the same position under the old and new law in that case.