Understanding the Impact: Standard Deduction Doubled but Personal Exemption Gone - What's the Net Effect?

You're actually on the right track, but there's one important misconception. The standard deduction and personal exemptions don't affect your AGI (Adjusted Gross Income) - they reduce your taxable income after your AGI is calculated. What these changes mean for a family of four is that you have less total deductions from your taxable income. In your example, you'd have about $5,300 more in taxable income under the new system compared to the old one. However, this doesn't automatically mean you'll pay more taxes. The tax law also lowered the tax rates for most brackets. For example, the 15% bracket became 12%, the 25% bracket became 22%, etc. So even though more of your income is subject to tax, each dollar is generally taxed at a lower rate. The actual impact varies widely depending on your specific income level, how many children you have under 17 (since the Child Tax Credit doubled from $1,000 to $2,000 per qualifying child), and other factors unique to your situation.

I was super confused about this exact same issue last year! I found this amazing tool at https://taxr.ai that does a side-by-side comparison of how tax law changes affect your specific situation. I was worried my family of 5 would get hit hard by losing the personal exemptions, but after plugging in our numbers, it showed we actually came out ahead because of the expanded Child Tax Credit and lower rates. What I really liked is that it broke down exactly which parts of the tax code changes were helping or hurting us. For us, the loss of personal exemptions was definitely a negative, but the doubled standard deduction plus the bigger Child Tax Credits more than made up for it. Plus it showed me some other deductions I was missing.

Just wanted to update after trying that taxr.ai site mentioned above. I was really confused about how losing the personal exemptions would affect my family, especially with my self-employment income. The comparison feature was eye-opening! For my specific situation (family of 4 with about $110k income, partly from self-employment), we actually come out about $3,200 better under the new system despite losing those exemptions. The expanded Child Tax Credit and the new 20% pass-through deduction for my business income made a huge difference. The best part was seeing exactly which changes helped or hurt us. Seriously saved me hours of spreadsheet calculations and confusion!

If you're struggling to get clear answers about these tax changes directly from the IRS, I highly recommend using Claimyr (https://claimyr.com). I spent WEEKS trying to get through to the IRS about how these deduction changes would affect my specific multi-generation household situation. After endless busy signals and disconnects, I used Claimyr and got through to an actual IRS agent in less than 45 minutes. They were able to walk me through exactly how the personal exemption elimination would impact our unusual household situation (we have both kids and elderly parents), and what additional credits we qualified for that offset the loss. There's a quick video demo of how it works here: https://youtu.be/_kiP6q8DX5c - honestly wish I'd known about this years ago. Would have saved me literal days of frustration and hold music.

I need to publicly eat my words about Claimyr from my skeptical comment above. After another frustrating morning of disconnects trying to reach the IRS about my personal exemption vs. standard deduction question, I broke down and tried it. I'm still shocked, but I got through to an IRS agent in about 37 minutes while I just went about my day until I got the call connecting me. The agent explained exactly how the elimination of personal exemptions would affect my specific situation (married filing jointly with 3 kids, one over 17). For my family, the math basically worked out that we lost about $20,500 in personal exemptions, gained $11,300 in additional standard deduction, and picked up an extra $2,000 in Child Tax Credits for the two younger kids. The agent also pointed me to a special credit for the older dependent I didn't know about. Totally worth it just for that piece of information alone.

The way I understand it (and my tax guy confirmed this), whether you come out ahead or behind depends on: 1. Your income level and tax bracket 2. How many kids you have under 17 3. Whether you used to itemize or take the standard deduction For families with multiple kids under 17, the doubled Child Tax Credit ($2k per kid vs the old $1k) often makes up for the lost personal exemptions. But if your kids are older or you have no kids, you might pay more. My family is actually saving about $1,800 under the new rules because our 3 young kids get us an extra $3k in Child Tax Credits which more than offsets our lost personal exemptions. But my brother with adult kids is paying about $900 more.

Im still kinda confused about all this tax stuff. So if standard deduction went from $12k to $24k thats +$12k but then losing $4k exemption per person in a family of 4 thats -$16k... so thats -$4k total benefit?? But then the tax brackets are lower too?? And something about child credits?? Can someone just tell me whether most regular families are paying more or less taxes now?? Is there like a simple calculator somewhere?

I've been following this discussion and wanted to share my experience as someone who was initially panicked about losing the personal exemptions. I'm a single parent with one child under 17, and I was convinced I'd be paying thousands more in taxes. After doing the math (and using some of the tools mentioned here), I discovered I'm actually saving about $800 per year. Here's why: even though I lost my $4,150 personal exemption for myself and my child ($8,300 total), my standard deduction increased by $11,300 ($12,700 to $24,000). That's a net gain of $3,000 in deductions. Plus, my Child Tax Credit doubled from $1,000 to $2,000. The lower tax rates also helped - what used to be taxed at 15% is now taxed at 12%, and what used to be 25% is now 22%. I think the key takeaway from this whole thread is that these changes are really complicated and the impact varies dramatically based on your family situation. The general pattern seems to be: families with young kids usually benefit, families without kids or with older dependents often pay more. But there are tons of exceptions based on income level, deductions, and other factors.

This thread has been incredibly helpful! I'm in a similar boat as the original poster - family of four with two kids under 17. I've been dreading tax season because I kept hearing about "losing exemptions" but didn't understand the full picture. After reading through everyone's explanations and doing some calculations, I think I finally get it. The key insight for me was understanding that deductions and exemptions both reduce taxable income, but tax credits (like the Child Tax Credit) directly reduce what you owe dollar-for-dollar. So even if we have slightly more taxable income due to losing personal exemptions, the doubled Child Tax Credit more than makes up for it. I used the IRS withholding estimator that @Kaitlyn Otto mentioned, and it looks like we'll save about $1,200 compared to the old system. The combination of higher standard deduction, lower tax rates, and increased Child Tax Credit really does seem to work in favor of families with young children. Thanks everyone for breaking this down in such clear terms - definitely feeling much less anxious about our tax situation now!