Seniors Benefit Under Tax Bill

GOP plan keeps tax break for America’s seniors intact

December 27, 2017

James N. Mattis / CCL; De Visu / Shutterstock.com

The recent tax reform bill has been slammed by progressives as a windfall for the wealthy. But anger and hysteria over the legislation grossly simplify its many clauses, including one particularly important detail.

If you look past the signal noise generated by the liberal media about the GOP tax overhaul, you may shocked to find that a popular tax break for seniors will remain intact. Americans age 65 and older or blind can still claim the additional standard deduction, amounting to $1,300 when they file for 2018.

Tax break for seniors

The Tax Cuts and Jobs Act signed into law by President Trump last week doubled the standard deduction from $6,000 to $12,000 for single filers and up to $24,000 for joint filers. It also retained a tax break that has been glossed over: the additional standard deduction.

Filers who are over 65 or blind to save $1,300 on their income in 2018. Two married taxpayers who are 65 or older would be able to claim an additional $2,600 in 2018. Single filers over 65 are eligible for an additional $1,600 on top of the $12,000 from the standard deduction.

Medical expense deduction

The bill also maintains the medical expense deduction, which could be a boon to senior taxpayers.

Earlier versions of the bill planned to scrap the deduction. The final version that was signed into law, however, extended the deduction for two years.

This tax break allows taxpayers who itemize their deductions to write off medical expenses that exceed 7.5 percent of their income for 2017 and 2018. Starting in 2019, the threshold will return to 10 percent.

Seniors were already using the 7.5 percent deduction. But seniors will now be able to take advantage of that deduction, which was scheduled to rise to 10 percent after 2016, for at least two more years.

According to CNBC, about 8.8 million Americans used the medical expense deduction in 2015, saving $86.9 billion. Nearly 75% of peoplewho claim the deduction are age 50 or older, according to an estimate by AARP.

Political smears

Progressives have fixated on the tax cuts to corporations and the wealthiest Americans, citing those reforms as examples of unfair legislation that will punish middle and lower-income Americans. But that characterization glosses over the details.

The Trump tax plan isn’t “stealing” money from anyone. It allows Americans in all tax brackets to keep more of their income.

How can something be considered theft when the end result is to take less from them? This is progressive logic.

Time will tell whether the corporate breaks will be the wind in America’s economic sails. The stock market rallying and consumer confidence are already on the rise; it would be premature in the least to condemn the tax plan before seeing its effects.