What to expect from President Trump's tax plan
JEFFERSON CITY - Two nearly identical American taxpayers could have different returns because of the new tax plan President Donald J. Trump signed into effect December 2017.
“It's not a serve one serve all tax change. It's going to apply to each individual return on an each individual basis,” tax planner Jeff Krieger said.
One factor that helps determine a taxpayer’s return are dependents. Krieger said returns can vary from dependents being under 17 or in college. A taxpayer’s home mortgage will also affect their return.
Although the plan varies from individual to individual, it gives both taxpayers and tax planners more time to prepare. Previous tax acts gave accountants only 10 days.
“I told you to buy blue shoes all along and then on December 22 I told you, you can't buy blues shoes. You have to buy red shoes,” Krieger said. “We just wasted 11 and a half months of tax planning. We had 10 days to correct ourselves. That's not good for anyone.”
Now tax planners have a year to advise their clients.
“Accountants like me are kind of jumping up and down right now,” Krieger said.
He also said families that make less than $150,000 would potentially benefit from the plan. Families that make $175,000 and up would potentially experience negative effects.
Krieger read through the tax plan and came up with this list of significant changes:
Deducting business employee expenses using your own car, house, tools etc. is not allowed.
There is a ten thousand dollar cap for state and local taxes, which includes personal real estate taxes.
The marriage penalty is virtually eliminated.
Capital gains taxes experience very little change.
Deducting moving expenses is not allowed.
The standard deduction doubles, but personal exemptions are eliminated.
Mortgage interests, charitable contributions and medical expenses are all changing.
These changes expire in seven years.