Many Americans across the country are wondering how the new tax law will be affecting them. Top GOP leadership has long been working towards changes to what they call a Byzantine Tax Code.
On Wednesday, they finally got their wish a tax code rewrite is heading to the president’s desk. However, what will the complex changes mean for the people filing?
President Trump says, “It’s the largest I always say the most massive but it’s the largest tax cut in the history of our country.”
With the bill expected to be signed into law soon, how will this affect folks when they go to file their taxes next year.
Tax specialist Felecia Bowden thinks this is because of change in how deductions and exemptions work. Bowden says, “I think that the people with younger children will be ok; I think that they’re going to benefit the most.”
In 2018, the bill is set to do away with personal exemptions which will hurt families with college-age children.
John Friend and Company President John Friend says, “Married filing joint you got three kids so you know you’re at that time you have five exemptions and they’re all worth $4,050 a piece well, you know right then and there, you’re losing $20,000 worth of taxable deduction that lowered your taxable income down.”
The bill does try to balance this out by doubling the child tax credit for children under 17 to $2,000 and doubling the standard deduction from $12,000 to $24,000.
Another part of the bill was unraveling long tax reforms into what Trump called just one postcard-sized form. Experts are skeptical of this claim.
Bowden says, “I can tell you one thing: nobody is filing on a postcard because it just got more complicated.”
As the tax bracket starts to shake itself out, Friend is finding that this bill may help middle-class Tri-State residents. Friend says, “What I’ve found on the average, for the most part, it’s about a give or take depending on the circumstances–it’s about a 20 percent reduction in the most middle-class activities.”
Friend says a good way to check out how the rework will affect your taxes is to look at Tax Plan Calculator.