The current tax laws are something that will affect everyone, yet many people do not take the time to understand what tax law is and how it works says, William D King. This article explains why you should care about proposed changes to the US Tax Law.
The Truth about the Proposed Tax Law Changes and Why You Should Care
Many individuals claim they want lower taxes, but once they hear of specific changes to their income or their business’s earning potential, they change their minds quickly. The truth is if a company does not make a profit then a company cannot survive in a competitive business world. In order for companies to remain in business and keep jobs, they must be profitable. If companies do not produce a profit then there would no money available for expansion projects, new equipment, wage increases, and bonuses. Income taxes are a growing concern for many individuals and businesses owners.
A lack of understanding about the changes and future tax law revisions has caused anxiety to business owners and investors around the world. It is important to set aside fear and negativity surrounding this topic, so we can all work together to try to better understand the facts. Taxes help pay for roads, schools, police forces, and other public services that benefit everyone’s lives by bringing more security into our communities. Learning how taxes impact our daily lives helps us see more clearly why they exist in society today.
The Current Tax Legislation:
At this point in time, there is no specific plan of action is guaranteed to pass through the House and Senate. Although, there are many proposals being considered that have the potential to change tax payer’s lives forever says, William D King. A few proposals include:
Increased Income Tax for Middle Class Individuals
An increase in income tax would be applied to most individuals with an annual salary of more than 75000$. This large jump in taxes is speculated to benefit middle-class workers who are currently taxed at a lower rate, leaving them with less money after taxes are paid out. These proposed changes would give middle-class people even less spending power, placing them in either further debt or into a position where they must focus on paying off their credit cards rather than spending towards long-term savings goals.
The Reduction of Home Mortgage Deductions
Currently, home mortgage deductions allow owner-occupied homes to be deducted up to 1 million dollars. The new proposal would limit this deduction to home mortgages that are $500,000 or less. This deduction has always been something that helped middle-class American’s invest in their future and prepare for retirement. Homes help secure the average American’s financial future. Because it is often one of the only forms of collateral they can offer for loans like college or business startup costs. Not to mention any other unforeseen situation where cash might be needed immediately.
The Elimination of Other Deductions
Charitable donations, Casualty losses, Student loan interest payments. And many others will no longer be deductible expenses after the end of 2017. These deductions currently allow taxpayers to either reduce their taxable income or get a refund from the IRS. The elimination of these deductions will hurt small businesses and hard-working individuals. Who is trying to get ahead in life by innovating new ideas for products or services. That could benefit all Americans explains William D King.
The Increase in Childcare and Elderly Care Deductions
Currently, childcare expenses can be deducting up to 5000$ per child while elderly care expenses cannot exceed 2,500$. William D King says these proposed changes would allow both forms of deduction. To increase depending on how much you spend. This change allows the average family to save more money because it reduces their taxable income. As many people know having children is not cheap. So any help families receive should be appreciating rather than discriminated against.
There will always be opposition when any big changes come into effect and there will always be supporters as well.
Keep in mind that these proposals do not guarantee any changes to existing tax laws just yet. But we must remain cautious of the future. The United States already has an interesting history when it comes to taxes so now is as good a time. As ever to capitalize on this opportunity and start preparing for whatever may come next. With certain key strategies such as investing in real estate or cryptocurrencies like Bitcoin.
No matter what happens it’s important to remember. That each day you’re alive you have a chance at a better tomorrow, one step at a time. Life can be too short to spend worrying about things out of your control, especially when they haven’t happened yet! Stay positive and keep moving forward…
Conclusion:
Although, there are many proposals being considering that have the potential to change tax payer’s lives forever. A few examples include:
Increased Income Tax for Middle-Class Individuals. An increase in income tax would apply to most individuals. With an annual salary of more than 75000$. This large jump in taxes is speculating to benefit middle-class workers who are currently taxing at a lower rate. Leaving them with less money after taxes are paid out. These proposed changes would give middle-class people even less spending power. Placing them in either further debt or into a position where they must focus on paying off their credit cards. Rather than spending towards long-term savings goals.