In: Accounting
1. Having reviewed the various changes that apply to individual taxpayers as a result of the 2017 Tax Cut & Jobs Act, throughout the semester, I feel that that the most significant aspect that will affect the average individual taxpayer positively is ______________. Please post your thoughts on this topic, support your opinion with the specific change in the law and why you feel this particular issue will have the broadest economic effect.
2. Having reviewed the various changes that apply to individual taxpayers as a result of the 2017 Tax Cut & Jobs Act, throughout the semester, I feel that the most significant aspect that will affect the average individual taxpayer negatively is ______________. Please post your thoughts on this topic, support your opinion with the specific change in the law and why you feel this particular issue will have the broadest economic effect.
Solution :
The individual tax payers are benefitted by many ways, which is the reason it affects positively.
Following are the reasons for the positive affect in Changes in the Act.
1. Lower tax rates lowering the tax liabilities for the individuals.
2. Increased limit for standard deduction to $24,000 from $12,700 for married couples filling together. This gives positive impact on couples to file together to get the standard deduction.
3. Use of 529 plans. This is useful for the individuals for their children's college for private school tutions for grade K-12 for 10,000 per year per student.
4. The partially refundable child tax credit is doubled to $2000 which is available to every dependent child under 17 age. Rhe phaseout threshold is also increased to $400,000 for married couples.
The facts that affects the Average individual negatively with the changes in the act are as follows :
1. Personal exemptions are eliminated which were earlier provided at $4000 per person. Though it is said that standard deduction limit which is increased is adjusted with the elimination of this exemption
2. The changes made in this law are not permanent. They have a expiry date of year 2025. This means the law will get back to the place where it was before the changes were made. It means the people will now have to vote them back to make this changes a permanent in nature.
3. Due to increase in the standard deduction limit, many other deductions are cut Down or directly removed such as a cap of $10,000 on any taxes paid on the state and local level, a reduction in the mortgage interest limit, elimination of unreimbursed business expenses, and an elimination of miscellaneous deductions which previously included fees for investment management and tax preparation.
Therefore it is concluded things are just adjusted from one place to other giving no powerful effect on over all changes for individual as such.