Will the tax plan help you? How will you be affected? Many Americans are concerned and happy about this tax plan. President Trump introduced this tax plan in December of 2017 for the following year of 2018. The tax plan takes effect on January 1 of 2018, but will not affect the taxes you pay in April of 2018.

Trump’s tax plan call for big State and local tax deductions. His plan also includes increasing the child care tax credit. It also calls for lowering corporate tax rate. Now that versions of the tax bill have passed both the House and Senate, the GOP is closing in on its first major legislative victory since Trump’s election. During a press conference President Trump stated that “He’s giving the largest tax cut in the history of this country.” His tax plan is fifth largest in estimated cost.

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It is estimated to cost 5.5 trillion dollars. It would be the third largest since 1940. In a speech in Pennsylvania President Trump said that “Since the election on November 8th, I’ve increased the value of your U.S. by more than the $20 trillion that we currently owe”.

The Tax Plan majorly affected the Child Care Tax Credit. The act increases the Child Care Tax Credit from 1,000 to 2,000 dollars for children under 17. It gives 500 dollar credit for each no-child dependent.

The credit helps families caring for elderly parents. The bill also changes who is eligible for the credit. Trump’s Tax Plan eliminates personal exemptions.  Before the tax cut taxpayers subtracted 4,150  from income for each person claimed. For some families with more children will pay higher taxes. It limits the deduction on mortgage interest. Taxpayers can deduct 10,000 dollars in state and local taxes.

They have to chose either property tax and income or sales tax. These to choices will impact taxpayers in high tax states as in California and New York. It expands the deduction for medical expenses for 2017 and 2018. It repeals the obama care tax on those without health insurance in 2019. 13 million people would drop there obamacare plans. In return the government would save 338 billion dollars by not having to pay peoples subsidies, but healthcare costs will rise.

The tax plan doubles the standard deduction. Before the tax cut taxpayers subtracted 4,150  from income for each person claimed. It limits the deduction on mortgage interest. Now that versions of the tax bill have passed both the House and Senate, the GOP is closing in on its first major legislative victory since Trump’s election. The tax plan raises the standard deduction to $12,000 for individuals and $24,000 for married couples.

The current standard deduction is $6,350 for individuals and $12,700 for married couples.The Tax Plan cuts corporate tax rates to. It cuts the corporate tax rate from 35% to 21% starting in 2018.

He originally said he hoped it was gonna be slashed down to 15%. The United States has one of the highest rates in the world. On average the rate is 18 percent. It raises the deduction to 20 percent for pass through businesses.

These businesses include sole proprietorships, partnerships, limited liability companies, and S corporations. Also private equity funds, hedge funds, and real estate companies. The act keeps the seven income tax brackets but lowers tax rates. Income levels will rise each year with the inflation. His original plan for cutting tax brackets was to bring it down from seven to four tax brackets, but in the final bill it stayed at seven.

It does change them though. Trump said that “the new brackets would be 12%, 25%, 35%, and 37%”. The new brackets did not get passed though. The tax rate was raised for the more wealthy with an average income of 500,000 dollars and the middle class and lower class tax rates were dropped. Then putting more money back in your pocket.

The top tax bracket will be at 37% instead of 39.6% in the past years. The tax plan calls for doubling the estate tax deduction.

Under the current law now the estate tax applies only to multi millionaires who transfer property to heirs. The new estate tax will allow the millionaires to transfer property without being taxed, but the estate tax will not be removed for good. This is something the house bill had proposed.

This doesn’t’ apply to many Americans but the wealthy need help to. Trump’s tax plan introduces an overall easier tax system. It eliminates obama care tax which is saving the government money and which is also saving us money.

The Tax Plan introduces many new ideas to the government while saving money and making it easier for the American people to make money. It is helping everyone out. It is putting money back into the American people’s pockets which trump promised to do.