Details About Exactly How Trump’s New Tax Bill Affects You

Photo: NY Mag
Details About How Trump's New Tax Bill Affects You, The Middle Class, Obamacare, And More
Buzz

This is the biggest tax overhaul in recent history.

On December 20th, 2017, Congressional GOP leaders passed Trump's tax bill the Tax Cuts and Jobs Act. The Republicans tried to pass the bill on December 19th, but they made an embarrassing procedural mistake forcing them to revote on December 20th. According to The Balance, the tax cuts will be 21 percent for corporations, the lowest since 1939.

This bill may provide short-term relief for ourselves and our families, though overall helps business more than average middle-class families.

According to The Balance, in 2019, everyone will see a tax cut. However, in 2021 those making less than $30,000 will start paying more in taxes and then, by 2023, the same will happen for those making less than $40,000. The American citizen tax cuts only last until 2025, while business tax cuts are permanent. High-income families will see the most benefits. 


RELATED: It Sure Feels Like We're ALL Being Gaslighted By Donald Trump


The Washington Examiner reported that the tax cuts will increase the national debt by $448 billion over the next ten years. Republicans are banking on tax cuts boosting the economy and therefore creating jobs and increasing wages which will contribute to overall economic growth.

But how else will the tax bill affect you in the long run? Here is how Trump's bill is going to affect you in 2018. 

You may be in a new tax bracket

According to Business Insider, the GOP's original plan was to simplify taxes by reducing the number of income tax brackets from the current seven down to four. However, the final version of the plan keeps seven total brackets but shuffles rates and income ranges. While that likely means you will see a tax cut, Business Insider explains that it'll break down to a difference of less than $100 a month per family.

You may lose your Obamacare (ACA) insurance

According to CNN, the tax bill effectively weakens Obamacare, which covers more than 12 million people this year, including many young people. Healthcare will no longer be mandatory, which means the number of uninsured Americans will increase. According to Business Insider, premiums on the individual market are expected to increase about 10 percent a year over the next decade without the mandate. If your medical bills are high, the deductions for the bill will be devastating.

President Trump himself said that the passage of this tax bill marks the end of the ACA, saying, "We have essentially repealed Obamacare". 


RELATED: If Obamacare Is Repealed, My Husband Might Die


 

If you’re paying student loans

According to The Hill, student loan interest tax deductions will remain the same. According to CNBC, originally the House bill aimed to repeal the student loan interest deduction, which allows student loan borrowers who make up to $65,000 and married couples who make up to $130,000 to lower their taxable income by $2,500. However, members of the Senate negotiated to allow student loan deductions to remain.

If you're improving your house

According to CBS News, you can keep deducting interest on home equity loans up to $100,000 as long as you're using the money for home improvements. If you use your home equity loan for anything other than home improvement, you can't deduct the interest. 

If you're paying high property taxes

Washington Post reported that the GOP planned to repeal mortgage interest and property tax deductions in favor of a 'homeownership tax credit.' According to CNN, under this plan, individuals would be able to deduct up to $10,000 in state and local income and property taxes which would mean those in high-tax states would end up paying more. Under the new tax bill, you'll have to choose between deductions for property taxes or income and sales taxes.

If you have children

The Balance reports that Trump's tax bill eliminates personal exemptions. With the standard deductions being doubled, David Kamin, a New York University law professor and ex-Obama aide, told the Wall Street Journal that a married couple making $56,000 a year would end up paying about $60 more in taxes per year instead of seeing a tax cut. 

RELATED: I Don't Know How To Explain To You That You Should Care About Other People

Author
Editor