by Countable | 1.4.18
In late December, Congress passed the Tax Cuts & Jobs Act. Many wondered how the bill would affect their finances, so CBS News tapped Jeffrey Levine, a New York-based certified public accountant, to run numbers on three different households.
Here are the CPA’s findings:
Makes under $40,000 a year
"I got good news for you, Marcie," Levine said. "You're getting more money back next year.”
George will benefit from the doubling of the child tax credit, and Levine estimates a savings of about $1,300 in taxes.
Make over $150,000 a year
"I actually think they would pay tax on about $12,000 more of income," Levine said. "But because of the lower rates, they actually end up saving a little bit of money."
The couple will be switching to the newly-increased "standard deduction," which means a simpler return with no itemized deductions. Levine estimates they’ll owe around $650 less than before.
Small business owners
Pharmaceutical sales rep.
Make around $300,000 a year
"Layne and Melissa are from California, a very high income tax state so a lot of people are worried, 'oh my gosh, this is really going to hurt me,'" Levine said. "It actually is really going to help them, though."
According to Levine, the Lev’s itemized deductions, including breaks for state and local taxes, will be much lower. "But they'll no longer be hit with the alternative minimum tax and will now qualify for child tax credits when they didn't before," CBS reported. “Overall, Levine estimates they'll be responsible for nearly $13,000 less in taxes.”
Levine concluded that every one of the families he looked at "will have more money in their pocket next year." CBS News noted, however, that Levine pointed out "his calculations are just estimates and says everything could change again in a few years when many of the new provisions expire.”
The New York Times posted an interactive Tax Bill Calculator.
Are you predicting a tax break in the future? Do you support the Tax Cuts & Jobs Act? Hit Take Action and tell your reps, then comment below.
(Photo Credit: RRice1981 / iStockphoto)
Written by Countable