The Tax-Cut Plan, known as the Tax Cuts and Jobs Act, passed on November 16, 2017. It’s a comprehensive tax restructuring that will affect every business and household in the country and is aimed at cutting taxes for many Americans, improving economic growth for businesses, and enhancing spending power for consumers. There are some legal and economic complexities. Following are some highlights.
Who Does the Tax Cuts and Jobs Act Benefit?
The Tax Cuts and Jobs Act is mainly intended to cut tax rates for individuals, small businesses, and corporations. For businesses, the corporate tax rate would go from 35 percent to 20 percent, while individual tax brackets would go from seven percent to four. The following is a breakdown of the different tax brackets:
According to Tax Foundation studies, this restructuring increases the GDP (gross domestic product) by 3.5 percent, while effectively increasing wages by 2.7 percent and creating 890,000 new jobs.
Perceived Negative Aspects of the Tax Cuts and Jobs Act
One of the perceived negative impacts of the new tax bill is the removal of many popular tax deductions. One of the most impactful is the elimination of a deduction for medical expenses. Older Americans can’t write off any of their medical expenses, nor can they deduct the premiums of the Affordable Care Act. Other deductions that are gone include tax preparer expenses, moving expenses, college expenses, and losses due to theft.
But this bill has not officially passed yet. Changes are still being made since the House and Senate passed two separate bills. If you feel these changes are unfair, you can contact your local representative and let them know.
Although the act is designed to improve your wage and earnings outlook, its provisions aren’t foolproof for everyone. Connect with other older adults and read the featured articles on SuperSeniorConnection.com to learn pertinent information about the tax bill as you interact with others affected by its changes.
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