President Trump signs Republican Tax Plan

By Adam Przeslak, sports editor.

President Trump signed a Republican tax plan that reached his desk on Dec. 22. The plan, entitled the Tax Cuts and Jobs Act of 2017, was the first widespread tax overhaul to be passed by the United States government since Ronald Reagan was in office. The first aspects of the tax bill went into action on Jan. 1.

Plenty of changes are expected to occur in 2018, which left many trying to pay their taxes early at the tailend of 2017 in an attempt to avoid new regulations.

According to CNN, some changes include the amount of money you can exempt from being taxed on income taxes, known as the “standard deduction,” being nearly doubled under the new tax bill. The change in standard deduction is believed to be an effort to curb people from “itemizing” their taxes, which allows the taxpayer to deduct a number of expenses such as medical bills, dental bills, charitable donations and mortgage interest.

CNN also states, the tax credit for a child under 17 years old has also been raised to $2,000 and is now available to more people. Previously, people in higher tax brackets did not have access to a tax credit for children, but the new tax plan made it available to them. The credit can now be claimed by single parents making up to $200,000 or married parents making up to $400,000.

The bill also still allows for the deduction of student loan interest up to $2,500. Earlier drafts of the tax plan proposed eliminating or lowering this deduction, however, late changes to the plan altered this before it reached the president’s desk.

For those getting divorced after Dec. 31 of 2018, writing an alimony check will no longer be allowed as a tax deduction. There is also no longer a tax break in place for individuals and couples that pay a professional to prepare their taxes or use tax preparation software.

According to USA Today, One of the most important selling points for Republicans was the decrease in corporate tax rates from 35 percent to 21 percent beginning in 2019.

So, now American corporations are being taxed less as earnings are expected to go up. Republicans hope to see these tax cuts for corporations inspire CEOs to create new jobs and hire more American workers. However, 14 percent of CEOs interviewed in a Yale University survey claimed that they planned to make immediate “capital investments,” or in other words start the building of new factories, plants, etc.

Comments are closed.