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How does the new Republican tax law affect you?

On December 22, 2017, President Donald Trump signed the Tax Cuts and Jobs Act into law. Most of the new provisions go into effect on 2018's taxes. So you will file your 2017 taxes with little or no changes.

The new tax plan cuts the corporate tax rate from 35 percent to 21 percent beginning in 2018. Additionally, the top individual tax rate will drop to 37 percent. The law overall cuts income tax rates, doubles the standard deduction, and eliminates personal exemptions. The corporate tax cuts are permanent but the new individual rates will expire at the end of 2025.

Personal Income Rates

How does this all affect you? Here's a breakdown based on a rough estimate of your annual salary. Employees will first see changes in their February 2018 withholdings.

TheBalance.com

The Act keeps the same seven tax brackets for individuals. The 2017 rates will be reinstated in 2026 under this law. The new plan helps higher income families the most in terms of receiving the biggest tax cuts. The Tax Foundation has said that those in the 20 to 80 percent income range would receive a 1.7 percent increase in after-tax income. Meanwhile, people in the 95 to 99 percent range would receive a 2.2 percent increase.

Business Rates

The Act has more changes for business than it does for individuals. The new corporate tax rate at 21 percent is the lowest since 1939. The United States has one of the highest business tax rates in the world, but most corporations don't pay that much. The effective rate, when you take into account deductions and loopholes, is only around 18 percent.

The Act also raises the standard deduction for pass-through businesses to 20 percent. This deduction will also expire in 2026. A pass-through business includes sole proprietorships, partnerships, limited liability companies, and S corporations. This classification also includes real estate companies, hedge funds, and private equity funds. The deductions go away for service professionals when their income reaches $157,500 for singles and $315,000 for joint filers.

Another feature of the Act will allow companies to repatriate the $2.6 trillion they collectively hold in foreign cash stockpiles. They will pay a one-time tax rate of 15.5 percent on cash and 8 percent on equipment. Most famously, Apple holds $252 billion in foreign cash. This new tax rate will allow the company to bring it back to the US without a substantial tax hit. A similar “tax holiday" in 2004 provided little boost to the economy, according to the Congressional Research Service. The repatriated cash was distributed to shareholders over employees.

Changes To Deductions

The standard deduction for individuals has been doubled. Meaning, you can claim many more deductions that you could in the past. A single filer's deduction increased from $6,350 to $12,000. Married and joint-filer deductions increased from $12,700 to $24,000. These will also revert back to the 2017 level in 2026.

The Act also eliminates personal exemptions and most itemized deductions. This usually includes moving expenses, except for members of the military. Someone paying alimony can no longer deduct the payments, but those receiving them can. Deductions for charitable contributions, retirement savings, and student loan interest remain unchanged. But you can't take these as well as the standard deduction. The new law limits deductions on mortgage interest to the first $750,000 of the loan. Taxpayers can also deduct up to $10,000 in state and local taxes, but must choose between property taxes and income or sales taxes. The Act repeals the Obamacare tax for people without insurance in 2019.

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What U.S. Citizens Should Expect for the Next Four Years

Donald Trump is on his way to the White House, and against the odds, he's about to make a lot of changes that will reverse the Obama Administration. While there is uncertainty as to how Trump's plans will be enacted or changed from his initial proposals, here's an idea of what we should expect from this new Republican president.

First of all, Mr. Trump is bringing in a Republican House senate, which according to Benjy Sarlin of NBC News, will increase his chances of passing major legislation. Though President Obama had a lot of great ideas for change, he got a lot of pushback from Congress. The Republican party will be difficult to unify, since there have been such divisions as of late, resulting in dropped endorsements. But actually, some of these supporters-turned-unsupporters later re-endorsed Trump. Flip-flopping on issues is something to look out for. Also, many of his top issues like trade, immigration, and national security involve executive power and are not passed by Congress.

It's hard to say if Trump will be a delegator or a doer. One of the actions in question is whether or not he will hire the special prosecutor he said he would to investigate Hillary Clinton's email case. Another is if he will sue the women he's threatened to sue when they came out with allegations of sexual assault.

Trump's first 100 days will likely involve erasing the fingerprint of the Obama Administration. Trump wants to repeal ObamaCare and Obama's Deferred Action for Childhood Arrivals program. This program gives temporary work visas to young, not-yet-legal immigrants. Trump will also attempt to put in higher background checks for Syrian refugees. This is a far cry from his original Muslim ban idea.

The issue here will be how Trump decides to prioritize his wide list of tasks. Will he start with foreign policy, or on the homefront, boosting jobs? The America he's coming into is not an easy America to fix, with a number of issues needing immediate attention. He also doesn't have a lot of time to accomplish his lofty goals. 4 years may seem long to some, but for a president, we're sure it goes by too fast.

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Will President Trump Help My Small Business?

In a well- publicized poll last September, Donald Trump appeared to be winning over small business owners by a pretty comfortable margin. This was seen, by many, as a response to Obama-era anxieties over issues like a raised minimum wage, health care, and concern with government over-regulation.

Yet many experts, like the generally unpolitical Rhonda Abrams, author of many books likes The Successful Business Plan: Secrets & Strategies, were adamant that his proposals would do little for the many small business owners out there struggling with taxes or trade. With his election last night as President, it's time to look at those polices and see what exactly they are.

Regulations

One big promise Trump has made is cut some of the red tape that businesses often have to face in their infancy before they can get a product to their customers. The only problem is that Trump hasn't specified much about what tape he plans on cutting. He's been most vocal on opposing the EPA's Clean Power Plan, which will probably help out if you run a coal-mining operation. Here's the scoop on what other regulations Trump might untangle.

Minimum Wage

While flip-flopping extensively on the issue, the alternative Trump finally offered to raising the minimum wage has been a combination of offering tax credits to families for child care expenses and expanding the Earned Income Tax Credit (EITC), that supplements the wages of low-income employees. On the plus side, this would shift responsibility to the government to pay for the rising costs of their employee's well-being, read about that here here. The downside? It's essentially a pricey welfare scheme that might not fare well with a Republican controlled Congress.

Taxes

Here's the note that many pro-Trump small business owners have talked about as a key plank behind why they supported the now-President elect. Danny Koker, star of the reality TV show "Counting Cars," endorsed Trump during an appearance on FOX Business, saying that "as you work harder, and as you try to become more and more successful, you seem to become more and more penalized whether it's with taxes or with regulations." Trump has promised tax cuts for business income but it will only apply to small businesses that are large enough to pay their own income taxes. If you pay income tax on a "pass-through," as in as part of your personal income tax, it isn't likely Trump will do much.

Health Care

Trump promises to repeal the Affordable Care Act with Health Savings Accounts (HSAs), which would demand employees make tax-deductible contributions to pay for their health insurance instead of obligating all businesses with fifty or more employees to ensure coverage for their employees. Here's an idea of how HSAs work and here's a review of current policy.

Trade

Another big issue Trump railed against as a candidate was trade: namely raising tariffs on imports and potentially sparking trade wars with potential exporters. Which means if you're a man manufacturer and your customer base is mostly domestic, you might enjoy less stiff competition. But if you're one of the 293,000 small and medium-sized companies who export, you might get hit hard.

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What Exactly is Donald Trump's Flat Tax Plan?

Taxes. We all love them, right? Now with a new president, you better bet that our tax plan is going to change. But with all of the controversial issues tossed around in this election season, you might need a bit of a refresher on Trump's Flat Tax Plan. Here are the main points, and what this means for you.

1. Reduce taxes

Trump wants to reduce taxes for everyone, but especially the working and middle-class Americans, who cannot afford their taxes in the first place.

2. No insane tax rates, even for the rich

In Trump's tax plan, everyone is a fair player. The wealthy will pay what they must, but no one's going to be paying exorbitant taxes. His goal here is to keep the spirit of entrepreneurialism and free-market economy in tact. He wants to preserve competition and jobs.

3. America-first

To do this, Trump plans to eliminate "special interest loopholes" and keep the business tax rate down to encourage competition and keep jobs on the home field.

4. Make it easier on families

Trump plans to allow families to deduct the average cost of childcare from their taxes, which would include stay-at-home parents.

For a breakdown on the specifics of Trump's tax plan, including the tax bracket plan, deductions, and business tax, be sure to check out his policies on his website.

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