Final answer:
False, while the exemption amount for dependents is currently set to zero, determining a taxpayer's dependents remains crucial for other tax benefits such as the Child Tax Credit and the Earned Income Tax Credit.
Step-by-step explanation:
The statement is false; even though the Tax Cuts and Jobs Act of 2017 set the deduction for dependency exemptions to zero for tax years 2018 through 2025, determining who is a taxpayer's dependent is still important. The determination of dependents can affect other tax benefits such as the Child Tax Credit, the Earned Income Tax Credit, and the Head of Household filing status, among others. Even with the exemption amount set to zero, these other tax provisions, which are based on having qualifying dependents, could significantly reduce a taxpayer's liability or increase their tax refund.
In the context of personal income taxation, the taxable income equation is taxable income = adjusted gross income - (deduction + exemption). This means even though the exemption value is currently zero, the calculation of adjusted gross income and eligibility for other deductions related to dependents continues to be a complex and essential part of the tax filing process. Therefore, the status of a dependent remains an integral component in determining the taxpayer's actual tax liability.