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What does this new tax bill mean for us Americans?

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Taxes and regulation

bettereveryday

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Please no infusion of politics and ideology, I'm just trying to make out what all this actually means.

I've read multiple articles which all appear to lower taxes no matter what income bracket your on, other than those making $0-$9k for singles and $0-$19k for couples, but yet everywhere I look people are saying the middle class will end up paying more in taxes over the long run.

Is this true? Anybody have any analysis on this issue
 
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CareCPA

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Wait for the reconciliation process. The end result (if any) may be completely different than either of the two passed bills.
 
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Mr.Brandtastic

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Tax enthusiasts: Taxes are great they pay for this and this and this

Also Tax enthusiasts: What do you mean my taxes are going up? I wanted them to go up on the working rich! I hate taxes!

Oh boy
 

MidwestLandlord

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Wait for the reconciliation process. The end result (if any) may be completely different than either of the two passed bills.

This ^^^

The house bill and the senate bill are significantly different.

Now they have to reconcile those differences and complete a final bill.

Then it goes to President Trump for signing.

Then it will have some sort of timeline for implementation, which requires the IRS to be, uhhh, competent.

During that entire process the media will report on the bill as if they actually know what will happen (no one does until it's actual law), and with wildly misleading political bias. (On both the left and the right)

TL;DR

Wait for it to get signed into law.

At any rate, the government considers me "rich" so I am keeping my expectations low.
 

Supercar

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I think I like it. I like it a lot!

The breakdown under the new bill:
dpGKKP7l-4psmFZLI1u4RYsyDJBLFuTnFdcq1eNNqPzty1a9j5vHYXx2Hn2nxr3u3kbbb7PKRqQk51Tkr2llPoy5c2tp9IXTzcfZEYyyaNDXORQM30JCf_H04ixBYpZQneCSAn8_


Corporate taxation
The on-the-books corporate tax rate will come down significantly. (The tax that companies have been paying after deductions and credits are taken into account has often been lower than the on-the-books rate.) The top corporate rate will fall from 35 percent to 21 percent, and the business version of the alternative minimum tax will be repealed.

Pass-through taxation
Taxpayers who have some or all of their business income taxed on their individual return stand to benefit. Such "pass-through" income -- which includes S corporations, LLCs, partnerships and sole proprietorships -- could qualify for a 20 percent tax-free deduction, with the top rate dropping from 39.6 percent to 29.6 percent. This provision sunsets after 2025.

What's in the final version of the tax bill?
 
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CareCPA

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There are quite a few pros and cons that we're still reading through in the accounting world.
One thing I find interesting: the corporate changes are written as permanent, the individual changes all expire.
 

MJ DeMarco

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I've avoided all research on the new tax changes until everything is written, signed, and passed into law.

(I've been boycotting all news lately except for news I get through my trading platform.)

I've heard there were some bad stuff about pass-thru corporations (S-Corps and LLCs) which almost entirely effects us here as entrepreneurs, and then I heard some good things. So with the mix, I just decided to hold off judgment.

A lot of things can change in reconciliation.

With Trumpmaster (if you like him) or Drumpf (if you hate him) being an entrepreneur, I hope he doesn't stick it to us.
 

CareCPA

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I've avoided all research on the new tax changes until everything is written, signed, and passed into law.

(I've been boycotting all news lately except for news I get through my trading platform.)

I've heard there were some bad stuff about pass-thru corporations (S-Corps and LLCs) which almost entirely effects us here as entrepreneurs, and then I heard some good things. So with the mix, I just decided to hold off judgment.

A lot of things can change in reconciliation.

With Trumpmaster (if you like him) or Drumpf (if you hate him) being an entrepreneur, I hope he doesn't stick it to us.
Based on my reading so far, no matter what Trump says, this tax bill will benefit him bigly.
The benefits for us smaller businesses is yet to be determined. There is some complicated math with the passthrough business deduction and its limitation to a percentage of wages. I don't see anyone's taxes increasing in the short term, but keep in mind the tax breaks for individuals have a sunset provision.
 
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PedroG

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There are quite a few pros and cons that we're still reading through in the accounting world.
One thing I find interesting: the corporate changes are written as permanent, the individual changes all expire.

But they can be extended. When that time comes, they would be crazy to let those expire after people have gotten used to the new rates.
 

CareCPA

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But they can be extended. When that time comes, they would be crazy to let those expire after people have gotten used to the new rates.
They can and often are (think Bush era taxcuts, 179 deduction, bonus depreciation, etc).
It just makes it frustrating to plan when they don't make things permanent.
 

TheOwl8

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Dec 5, 2013
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Please no infusion of politics and ideology, I'm just trying to make out what all this actually means.

I've read multiple articles which all appear to lower taxes no matter what income bracket your on, other than those making $0-$9k for singles and $0-$19k for couples, but yet everywhere I look people are saying the middle class will end up paying more in taxes over the long run.

Is this true? Anybody have any analysis on this issue


The politicians and media saying the middle class will pay more because of this tax bill are lying to you.

The internal revenue code is insanely complicated. The bill just passed and it is hundred of pages. Do you think the pundits at CNN actually know what they are talking about?

The primary losers are higher income earners in high income tax states. The guy in NY making $250,000 and paying massive income tax and property taxes will likely see their federal income taxes go up (all though the pass-through deduction could help offset this depending on their type of income). This is ending a form of subsidy from the US government to high income tax states.

People with large mortgages will also be negatively impacted. The couple with the $1 million mortgage are going to see their mortgage deduction limited. Same thing for the couple who financed their boat on a home equity line of credit. No longer deductible. This is ending a form of subsidy from the US government to the mortgage industry.

The other losers are people with tons of kids. If you have eight dependent children, you're losing out on a lot of exemptions. But this will be partially offset by the doubling of the child tax credit.

Lastly, a lot of tax preparers who make a living filing middle-class tax returns don't like it. Want to know why? Self-interest. Doubling the standard deduction means fewer people will itemize their deductions. Fewer people itemizing means less complicated tax returns and less schedule As. Less complicated taxes returns and less schedule As means lower demand for tax professionals and lower fees.
 
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mrarcher

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Meanwhile here taxes went up for everyone else so that people earning between 10 and 13k Get a 1% tax reduction.
Yes you read that right a maximum reduction of a whopping £130 per year while the rest get screwed or move south of the border and pay less.
 

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