This is in response to a letter of Dec. 27 indicating the new tax reform bill will really harm seniors in particular.
First, the author stated that for the people who do itemize, that the medical deduction has been eliminated; this is not true. In fact, it is now more generous for seniors than those under 65.
For 2017 and 2018, the threshold for using this deduction is 7.5 percent of your adjusted gross income as opposed to 10 percent for those under 65. It does become 10 percent after two years for everyone, but it still will be available.
Currently about 70 percent of taxpayers use the standard deduction. It is estimated that this figure will be around 95 percent with the doubling of the standard deduction. Again, those over 65 or blind will retain the added standard deduction amount. For single taxpayers, that means an additional $1,600 on top of the $12,000 and for married taxpayers - both over 65 - it means a standard deduction of $26,600 instead of $24,000.
In over 30 years preparing taxes, I can say almost all of my senior clients use the standard deduction; those that do itemize usually have high medical expenses. The new law will not change this. The $10,000 limitation for deducting state and local taxes should not be an issue for most seniors as retirement income is not taxable in Illinois therefore no state income tax deduction. (A small sales tax figure is still available)
If you pay high property taxes, the issue should not be resolved in the federal tax code. You need to look to Mike Madigan for relief (wishful thinking).