What the new tax law means to you - Part 1 - Personal taxes:
Bottom Line: It's now law. It's no longer a conversation and that means that starting next week you'll be saving significant money on your federal income taxes. If that sounds like a broad statement. It's a fact. Period. Nearly all Floridians who pays federal income tax will save significant money (and those who wouldn't would be the absolute wealthiest). Anyone who tells you anything to the contrary is lying to you. Pretty straight-forward right? Before I wade into the details here are a couple of important timelines and notes. First...
The new tax law takes effect in January 1st (no impact on your 2017 taxes)
While the new rates take effect right away it's likely to take additional time for the feds & employers to reflect withholding changes in your paycheck (this means that you'll likely not see the net impact immediately though it'd be accounted for when you file your taxes)
The personal tax cut applies through 2025 (due to fewer than 60 votes in the Senate)
The business tax cut is permanent (covered in part two)
The individual mandate for healthcare is eliminated starting in 2018
So, what does it mean to you?
There are still seven tax brackets: 10%, 12%, 22%, 24%, 32%, 35%, and 37% (all but the 35% bracket being a reduction in tax rate)
There is a near doubling of the standard deduction (Along with other changes in the plan the net effect would be much simpler tax filing for most who currently itemize. 32% of Americans currently itemize. That would likely drop to only around 6%)
End of the individual mandate / tax penalty for not having health insurance
Taxes would be deductible up to $10,000 (combination of state and local taxes)
Raises the cap for the Estate tax to kick in to nearly $11 million (double the current threshold)
Eliminates personal exceptions but doubles of the child tax credit from $1,000 to $2,000
Median income is currently $44,668. Using standard deductions...This person pays $5,319 in federal income tax currently. Under the new law the average person will pay $3,539. This means that the average Floridian making the average full-time income will save $1,780 per year in federal income taxes. To put this a different way - the average American just received a 4% raise that kicks in next week. That's a heck of a present after all. There are two sides to every story but just one side to every fact. Those are the facts.