What Was the Standard Deduction for 2018?
Find the 2018 standard deduction amounts and learn how major tax law changes that year, including the removal of the personal exemption, affected its value.
The standard deduction for the 2018 tax year was altered by tax legislation. These changes increased the deduction amounts for all filing statuses, which simplified tax filing for many individuals. This article provides the specific standard deduction figures for 2018 and explains the legislative context and eligibility rules for that year.
2018 Standard Deduction Amounts
Single filers and those married filing separately could claim a standard deduction of $12,000. Married couples filing a joint return and qualifying widow(er)s were entitled to a $24,000 standard deduction. Heads of household could claim an $18,000 standard deduction.
Taxpayers who were age 65 or older or blind at the end of 2018 could claim an additional standard deduction amount. For married individuals, this additional amount was $1,300. Unmarried taxpayers (single or head of household) could add $1,600 to their standard deduction. A taxpayer could receive multiple additional amounts; for instance, a single individual who was both over 65 and blind could increase their standard deduction by $3,200.
There were specific rules for individuals who could be claimed as a dependent on another person’s tax return. For 2018, a dependent’s standard deduction was limited. It could not be more than the greater of $1,050 or their total earned income plus $350. However, this amount could not exceed the base standard deduction for their filing status, such as $12,000 for a single individual.
Major Tax Changes Affecting the 2018 Deduction
The Tax Cuts and Jobs Act of 2017 (TCJA) was the driver behind the increase in the 2018 standard deduction. This legislation was a significant reform to the U.S. tax code that aimed to simplify the tax filing process for many Americans. By nearly doubling the standard deduction, the law encouraged more taxpayers to use this simplified method rather than itemizing deductions.
A corresponding change made by the TCJA was the elimination of the personal exemption. Prior to 2018, taxpayers could deduct a set amount, $4,050 in 2017, for themselves, their spouse, and each of their dependents. The removal of this exemption was a significant change that, for some families, partially offset the financial benefit of the higher standard deduction.
Who Could Not Claim the Standard Deduction in 2018
While the standard deduction was available to most taxpayers, certain individuals were ineligible to claim it in 2018. A married individual filing a separate return could not take the standard deduction if their spouse chose to itemize deductions. This rule prevents a married couple from having one spouse itemize specific expenses while the other takes the full standard amount. Nonresident aliens and dual-status aliens were not permitted to claim the standard deduction. An individual who filed a tax return for a period of less than 12 months due to a change in their accounting period was also ineligible. Entities such as estates, trusts, common trust funds, and partnerships could not claim the standard deduction.