On December 20, the GOP celebrated the passage of their new tax bill that is being praised by some and ridiculed by others. In either case, the tax bill is a substantial overhaul of a tax system that has not seen major changes in over three decades. Depending on which side of the debate you fall, you are either elated at the passage of the bill or you are dreading the implications for you and your family.
On one side, supporters of the new tax bill claim that the revisions of the tax system will accomplish several goals including:
- Simplifying the tax code making it easier for businesses and individuals to file tax returns;
- Decreasing taxes on all tax brackets providing substantial tax relief for the middle class;
- Allowing corporations and businesses to bring money back to the United States to invest in our economy;
- Encouraging businesses to create new jobs and raise salaries because of substantial tax cuts; and,
- Eliminates the Obamacare penalty if you do not have health insurance.
On the other hand, critics of the tax bill argue against the bill because:
- Individual tax cuts expire after 2025 while allowing the substantial tax cuts for businesses to continue;
- Businesses and corporations are reaping the largest benefits of the changes to the tax code;
- Eliminating the health insurance mandate will likely cause premiums to increase for those who continue to purchase health insurance through the marketplace;
- Many middle-class families will actually see a tax hike while the richest individuals in the country benefit from a huge tax cut;
- The tax bill increases the deficit substantially because it fails to pay for itself;
- Many of the tax changes benefit the wealthiest individuals and businesses; and,
- Will ultimately result in changes to programs that benefit the poor, elderly, and disabled individuals in our country.
Regardless of which side of the debate you find yourself on, it is obvious that the new bill will cause a great deal of confusion as individuals and businesses begin to digest the changes and incorporate the new tax rules to determine how the changes will impact their income and tax liability.
Do You Understand How the Changes Impact You?
Michael Kitces writing for the Nerd’s Eye View provides an extremely detailed analysis of the major provisions of the GOP tax bill in his article entitled “Individual Tax Planning Under The Tax Cuts And Jobs Act Of 2017.”
Michael reviews some of the major provisions of the bill and how those provisions might impact companies and businesses including:
- Changes in the Tax Brackets
- Repeal of Pease Limitation
- Marriage Penalty for High-Income Couples
- Lower and Simplified Tax Brackets for Estates and Trusts
- Child Tax Rates
- Capital Gains and Qualified Dividends
- Increase in Standard Deductions
- Elimination or Changes to Various Personal Exemptions
- Expanded Qualifying Dependent Care and Child Tax Credit
- Change in Mortgage Deductions
- Changes to College Savings Plans
- Lower Tax Rate for Income for Pass-Through Business Entities
- Increase in Estate and Gift Tax Exemptions
The article goes into great detail about each one of the above provisions, in addition to providing more information on other TCJA tax provisions.
Seek Advice from Experienced Michigan Retirement Planning and Estate Planning Attorneys
What the article highlights for many readers is the need for many individuals to seek assistance from professional tax, retirement, and estate planning advisors. For many people, the tax changes will change how they plan for retirement. It may also change how they structure their estate plan, including trusts and Medicaid planning strategies. To ensure that you protect yourself, your family, and your assets, you need someone who understands the implications of the GOP Tax Plan and how the changes could impact your plans for the future.
The Elder Care Firm of Christopher J. Berry, CELA can help you navigate the changes to the tax code contained in the Tax Cuts and Jobs Act. We can answer your questions about how the TCJA will impact your estate and retirement plans and help you make the changes you need to protect what you have worked so hard to accumulate for yourself and your family. Let our retirement planning attorneys help you utilize the changes in the code to maximize your retirement and estate plans.
Contact our law firm by calling 888-390-4360 or by using the contact form on our website to speak with an attorney or schedule a consultation to discuss your questions about estate planning, Medicaid planning, and retirement planning in Michigan.