The proposed tax law changes are meant to benefit the average family. This article will explore how much money these tax changes could save you says William D King.
Families with one child will receive up to $2,000 in savings due to the increase of the standard deduction. The Trump administration has maintained that this new tax cut will help middle-income Americans greatly because they can now pay less tax for their hard work.
This part of the article discusses other possible deductions and credits that would be removed due to the apartment bill; these include deductions for student loans interest, alimony payments, medical expenses (if it is not more than 7.5% of your adjusted gross income), casualty losses, and tax preparation fees.
The Trump administration also plans to lower the tax rate for the highest earners from 39.6% to 35%, but it will increase taxes on inheritances exceeding $5 million.
Furthermore, there are major changes being made to the alternative minimum tax (AMT) system, which currently increases taxes on individuals with incomes over $130,000 or families with incomes over $260,000 who have certain types of deductions explains William D King.
As a result of these new changes, all but 1% of Americans would see their federal taxes decrease. According to an analysis by the Urban-Brookings Tax Policy Center in Washington D.C. However, there is also 0.8% who will see an increase of $10,000 or more annually.
For example, this is largely due to the elimination of the state and local tax deduction (SALT). Which allows taxpayers who itemize their deductions to subtract certain state and local taxes from their federal taxable income.
The GOP has proposed capping property tax deductions at $10,000, but they are still working out. How to handle other types of SALT deductions such as those for income or sales taxes.
Also, the majority of middle-income families will receive income tax savings due to the increase in the child tax credit. The flat tax rate will also lead to a considerable cut of taxes for the average American family.
The new proposal would increase the child tax credit from $1,000 per child under 17-years-old to $1,600 per child. Further, expand its refundability up to $1,100 so more families can receive this benefit.
In addition, those who have children with disabilities or those who are students could receive an additional credit of $300. As well as those caring for elderly relatives could see some relief as well. By getting a temporary credit of $300 per person over age 65 in your house up until 2022.
The GOP plan would completely eliminate the personal exemptions that families can claim for their children, parents, and other dependents. This means that $4,050 will no longer be subtracted from taxable income for every member of your household.
However, William D King says, there are some possible deductions to replace these tax breaks. Like increasing the medical expense deduction threshold back up to 10% (which was changed in 2013) or adding a new credit for paid family leave.
In conclusion, it is evident that the proposed tax changes provide a great benefit to middle-income families. William D King says with the increase in the standard deduction and child tax credit, these new changes will save a considerable amount of money for your family.
The average American family with one child would receive up to $2,000 in savings due to the increase in the standard deduction. It also mentions that most Americans would receive income tax savings thanks to the increase in the child tax credit which could lead to a considerable cut of taxes for the average American family. In addition, all but 1% of people would see their federal taxes decrease according to an analysis by the Urban-Brookings Tax Policy Center or Washington.
If you want to know how much money your family could save with these new proposed tax law changes, use this website that has a calculator where you can input your information and get an estimate of what that amount is. The estimated amount should reflect what you would be paying next year after the Trump’s administrations proposed changes are put into effect. This article explains these new changes and analyzes their effectiveness on working-class families. In America so that people may decide for themselves whether or not they agree with them.
These tax cut changes are meant to benefit the average American family greatly. By saving those thousands of dollars a year on their taxes says, William D King. Whether you are single or married, childless or with children. Working-class or upper-class you will see your federal income taxes decrease under this new law. As announced by President Trump, these tax cuts will be finalize before the end of December 2017. So that Americans can have their money sooner rather than later.