The House of Representatives Tax Reform Bill passed Thursday is characterized most by cutting corporate and individual tax rates, but what could these possible changes mean for those here at home?
Eyewitness News talked with two non-partisan experts on what the house’s tax reform bill will mean for everyday tax payers.
Both the house and senate’s tax reform bill, if passed, promises major change for tax payers come 2018.
“If the standard deduction is being increased, you should have less tax payers itemizing, so you may not have to keep track of the medical expenses, and other sorts of things because the standard deduction is going to be so much higher,” said Brett Bueltel, CPA and Assistant Professor of Accounting at the University of Southern Indiana.
Itemized deductions like the mortgage interest reduction, student loans, and state and local taxes are being pushed aside for doubled standard deductions, at least in the house bill.
Promising, what Bueltel calls generalized tax cuts for many Americans, and a simpler way to file taxes.
Bueltel said,”It would simplify the tax code, because you wouldn’t have to deal with all those itemized deductions separately, you’d just have one standard deduction that you’d take right off the top.”
While the house bill, if passed as is now, may mean more money in Tri-Staters and Americans’ pockets, what it means for the future remains uncertain.
“While the corporate tax rate being cut is permanent , the tax cuts for individuals is set to expire in ten years, so we will see, unless again we see another follow up legislation, we will see our taxes go up after ten years,” said Dr. Sudesh Mujumdar, USI Economics Department Chair.
And with the possible reform, taxes may not be the only thing having an impact on your money.
“While you might benefit with more money in your pocket your mortgage interest rates might go up, you go buy and finance a car, that might go up, so you might see more money in your pocket, but you may end up paying more money to finance a home, to finance other purchases, so again that effect is not very clear as well in terms of what this tax cut does to the budget deficit going forward,” said Mujumdar.
The Senate’s version of the tax reform bill is still being negotiated in committee, with a vote by the panel expected Friday.
Depending on republican support on the bill, it could get a vote by the full senate as soon as after Thanksgiving.