Then, the good news for many filers is the nearly doubled standard deduction. Most tax policy wonks estimate more than half of all Schedule A filers will now happily take the standard deduction for federal purposes.
$12,000 Single and Married/Separate
$18,000 Head of Household
Formerly, you had a deduction, and an exemption.
Your itemized deduction included state income taxes, home mortgage interest and real estate taxes (for up to 2 homes) plus charity, medical (within limitations,) and certain business expenses (within limitations,) among other things. State and local taxes (SALT) now have a limitation of $10,000. This applies to your state income taxes, any sales tax, personal property taxes, and real estate taxes. Limiting this to $10K hurts a lot of people. However, the powers-that-be felt the new limit contributed to a leveling of the playing field. We shall see. I do know a lot of DIY people did not understand Schedule A, and mistakes were very common.
Also changed – you can no longer take a deduction for your investment fees, your tax prep, or your employee business expenses. Granted, most regular folks never got this deduction because even if they filled out the forms, the amounts did not go over the threshold. But it was apparently fun trying.
Some people will still itemize! I expect seniors will still have heavy medical expenses, and some people will still be extremely charitable. They talked about limiting charity, but they did not do it. (Yet.) Some people are reorganizing how they give so as to improve their tax situation. Example: Give a whopping amount every second (or third) year so as to itemize, but then slack off to the standard deduction in the off years.
As for that exemption – well, it’s just gone, too. No more multiplying by all the people you managed to cram into your tax return. Instead, there is an increased $2000 deduction for each child under age 17, and they’ve added a $500 “Other Dependent Credit” for miscellaneous other dependent relatives.