Lawmakers are set to vote on a revamped tax package this week, so how will it impact you?
The bill slashes the corporate tax rate from 35 to 21 percent, a win for big business. For the wealthy, it lowers the top tax rate from 39 to 37 percent and for middle-class Americans, the plan doubles the standard deduction, but it caps combined state and local income and property tax deductions at $10,000.
Previous analysis of the Senate plan found Americans earning $75,000 or less would pay more in taxes within 10 years. The package also eliminates the Affordable Care Act mandate requiring individuals to purchase insurance.
President Donald Trump is quoted as saying, "This will be great for jobs. It'll be fantastic for the middle-income people and for jobs. It'll also benefit lots of other things, I mean, we're looking to, if you look at the whole thing, everybody's going to benefit. But I think the greatest benefit is going to be for jobs and for the middle class, middle income."
The final legislation also nearly doubles the standard tax deduction, taking it to $12,000 for individuals and $24,000 for couples and this has some non-profits worried. A higher standard deduction could mean fewer taxpayers will itemize their deductions on their returns. Currently, only taxpayers who itemize may deduct contributions.
William Finnecy, Partner at BKD, CPA's and Advisors says, "there may be some disincentive to folks in a certain bracket that they won't need to make that extra one to two thousand dollar contribution to get above that standard deduction that is given to everyone to file".
The House is expected to vote on Tuesday and the Senate shortly thereafter.Republicans are confident they'll have the votes to send the bill to the president's desk before Christmas.
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