Money Matters: Tax Changes
Tell us a little bit about some of the benefits and some of the things that aren't quite as good with the tax change.
Well, from a high level, I guess taxes are something that everyone likes to talk about and it was the tax cut and jobs act in 2017 which is the biggest one they had in years. Effectively, some of the big things that happened is there were seven brackets before and there is still seven marginal tax brackets. All the brackets came down some. The highest bracket before was 39.6%, now the highest bracket today is 37%, so it's all come down a bit.
So, basically you are not going to be taxed as much on the same amount of money is what it amounts to.
Correct, a couple other big these that happened is that the standard deduction went from $12,700 and they doubled that to 24,000. Probably about 15% less people will actually itemize this year.
Is there a negative side for anybody in the tax change?
Yeah, it depends on where you live and if can be negative because what they did do they capped the state and local income tax deduction to $10,000, so the property tax on your house. If you got a real large house and your property tax is $14,000, the most you can deduct is 10,000.
So that's going to hurt some folks?
That's going to hurt some folks.
But mostly in a higher bracket?
Yeah, but mostly people who live in Chicago and the coasts and other communities, I'd say.