Deductions
Current law: The basic standard deduction for married couples filing jointly is $24,800 ($12,400 for single taxpayers or for married taxpayers filing separately, and $18,650 for heads of household). After 2025, the basic standard deduction is scheduled to revert to pre-TCJA amounts.
The TCJA suspended the personal exemption and most individual deductions through 2025.
Donald Trump: Extend the higher basic standard deduction and other deductions enacted by the TCJA that are scheduled to expire after 2025.
Joe Biden: Limit total itemized deductions so the reduction in tax liability per dollar of deduction does not exceed 28%, which means taxpayers in tax brackets higher than 28% will face limited itemized deductions.
Phase out the 20% pass-through deduction for income over $400,000.
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Tax credits
Current law: A child with an individual taxpayer identification number cannot be claimed for the Child Tax Credit but can be claimed for the $500 other dependent credit. A taxpayer with an individual taxpayer identification number is eligible to claim the Child Tax Credit and the $500 other dependent credit.
The maximum CTC is $2,000. This amount is scheduled to revert to the pre-TCJA amount of $1,000 after 2025.
The maximum child- and dependent-care credit is $1,200.
Workers older than 65 who do not have a qualifying child are not eligible for the Earned Income Tax Credit.
There is no tax credit for first-time homebuyers. There's also no tax credit for renters.
Donald Trump: Require a dependent to have a Social Security number to be eligible to be claimed for the $500 other dependent credit. Require a taxpayer to have a Social Security number to claim both the CTC and the $500 other child dependent credit.
Extend the $2,000 CTC enacted by the TCJA that is scheduled to expire after 2025.
Joe Biden: Raise the CTC to $8,000 for one child and $16,000 for two or more children for taxpayers with income up to $125,000 per year. The credit phases out for income between $125,000 and $400,000 per year.
Expand the EITC to workers older than 65 who do not have a qualifying child.
Enact a $5,000 tax credit for family caregivers of people who have certain physical and cognitive needs.
Enact a refundable, advanceable tax credit of up to $15,000 for first-time homebuyers.
Enact a renter’s tax credit, designed to reduce rent and utilities to 30% of income for low-income individuals and families who make too much money to qualify for a Section 8 voucher.
In next blogpost, we will compare their plans on Education Estate and Gift Taxes.