Trump Era Tax Cuts Are Set to Expire

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the Scribe
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Trump Era Tax Cuts Are Set to Expire Aug 21, 2023 15:07:29 GMT

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Post by the Scribe on Aug 21, 2023 15:07:29 GMT

some interesting comments below original article at that site

GOBankingRates

Trump Era Tax Cuts Are Set to Expire — Here’s How Much More You’ll Pay
www.yahoo.com/finance/news/trump-era-tax-cuts-set-160750197.html
David Nadelle
Sun, August 20, 2023 at 7:30 AM MST·4 min read
4.1k

Stuart Wallace/Shutterstock / Stuart Wallace/Shutterstock

When 2025 draws to a close, so will many of the sweeping Trump-era GOP tax breaks established by the Tax Cuts and Jobs Act (TCJA) of 2017. While the legislation made some tax cuts to corporate profit permanent, lowered individual tax rates will expire on Dec. 31, 2025, and will revert to pre-TCJA levels.
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www.gobankingrates.com/news/?utm_term=incontent_link_2&utm_campaign=1241681&utm_source=yahoo.com&utm_content=2&utm_medium=rss

The IRS Might Owe You $900: But Time Is Running Out To Claim Your Money
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Learn: What To Do If You Owe Back Taxes to the IRS
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Largely dependent on which party ends up controlling the White House and Congress after Inauguration Day 2025, changes to the tax code are coming. Whether cuts can be kept by Republicans, rates rewritten by Democrats or a divided government will agree on some sort of bipartisan compromise, taxpayers of every political persuasion will be affected.

In an editorial on RealClearPolitics, Julio Gonzalez, CEO and Founder of Engineered Tax Services, Inc., warns of a “harsh reality” facing Congress.

“We are in a situation in which many American families and businesses are hanging on by a thread. Letting the non-permanent provisions of the TCJA expire could be catastrophic to our overall economy and the well-being of many working families,” stated Gonzalez.

The TCJA spawned a bunch of changes to the tax code, but here are three key tax adjustments that you’ll need to consider before they turn back at the end of 2025.

Income Tax Rates

Although it kept seven income brackets, the TCJA lowered tax rates across the board and restructured bracket spans, making them more agreeable under the TCJA. With the exception of those who were at 10% (those making $11,000 or less) and 35% (those earning $231,251 to $578,125) tax rate levels prior to 2018, all income tax rates decreased when the new laws came into effect.

The top individual tax rate dropped from 39.6% to 37% under the terms of the Tax Cuts and Jobs Act (single filers making $578,126 and over), the 33% bracket fell to 32% ($182,101-$231,250), the 28% bracket to 24% ($95,376-$182,100), the 25% bracket to 22% ($44,726-$95,375) and the 15% bracket to 12% ($11,001-$44,725).

These bracket backslides will mean that every American will need to reassess their spending and tax returns to pay 1% to 4% more in personal taxes unless provisions are extended, revised or made permanent over the next 28 months.

Standard Deduction

Under the Tax Cuts and Jobs Act for the tax years beginning after December 31, 2017, and before January 1, 2026, the standard deduction was nearly doubled for all filing statuses. This led to fewer people itemizing deductions and instead opting for the standard deduction.

The TCJA significantly changed the standard deduction amounts for individuals and families. The standard deductions before the 2017 Tax Year were $6,350 for single filers, $9,350 for heads of household and $12,700 for those married filing jointly.

After the TCJA (2018-2025 tax years), these amounts jumped dramatically. The standard deductions for the 2023 tax year are $13,850 for those single or married filing separately, $27,700 for those married filing separately and surviving spouses and $20,800 for heads of household.

This change aimed to simplify the tax filing process for many individuals and families (Forbes estimates that 90% of taxpayers choose to claim the standard deduction). Claiming the standard deduction made it possible for many to skip the complicated process of itemizing deductions and potentially reduce taxable income.

Estate Tax Exemptions

American taxpayers with considerable estates benefit from larger exemptions, and because this tax can have a significant effect on your beneficiaries, it’s best to plan ahead for it in your estate plan if you think your estate may trigger it.

Billionaires vs. the Middle Class: Who Pays More in Taxes?
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Discover: This Secret IRS Loophole Lets You Reduce Your Retirement Taxes
www.gobankingrates.com/money/financial-planning/retirement-hack-irs-loophole-to-reduce-your-401k-taxes-with-variable-life-insurance/?utm_term=related_link_4&utm_campaign=1241681&utm_source=yahoo.com&utm_content=6&utm_medium=rss

The TCJA doubled the estate and gift tax exemption for individuals, from $5.49 million in 2017 to $11.18 million in 2018. Adjusted for inflation, the exemption was $12.06 million in 2022 and it increased to $12.92 million in 2023. This means that an individual can now pass on up to $12.92 million in assets without being subject to federal estate or gift taxes. For married couples, this effectively allows a combined exemption of $25.84 million.

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This article originally appeared on GOBankingRates.com: Trump Era Tax Cuts Are Set to Expire — Here’s How Much More You’ll Pay
www.gobankingrates.com/taxes/tax-laws/trump-era-tax-cuts-expire-how-much-more-pay/?utm_term=incontent_link_8&utm_campaign=1241681&utm_source=yahoo.com&utm_content=12&utm_medium=rss

Last Edit: Aug 21, 2023 15:16:52 GMT by the Scribe

the Scribe
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Posts: 24,146

Trump Era Tax Cuts Are Set to Expire Oct 9, 2023 23:33:19 GMT

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Post by the Scribe on Oct 9, 2023 23:33:19 GMT

Trump-Era Tax Cuts Are Expiring: What This Means For Retirees
1.7k
David Nadelle
Sat, October 7, 2023 at 4:00 PM MST·3 min read

Shutterstock / Shutterstock

Signed into law Dec. 22, 2017, the Tax Cuts and Jobs Act (TCJA) — informally known as the Trump tax cuts — contained a number of changes to individual tax rates that are set to expire after 2025. Barring congressional action, tax rates for 2026 will revert to the rates payers were subjected to before the change.
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Retirees, most of whom are on relatively fixed incomes, were less affected than others when the TCJA was introduced because the changes didn’t affect how Social Security and investment income were taxed.

However, all seniors are once gain going to have to reassess their spending and tax returns and face new financial decisions when standard, estate tax and charitable contribution deductions revert to pre-TCJA levels on January 1, 2026.

Standard Deductions

By nearly doubling the standard deduction and restricting many itemized deductions for state and local taxes, the TCJA resulted in millions of taxpayers shifting to the standard deduction.

For 2023 federal income tax returns (to be filed in April 2024), the standard deduction amounts are $13,850 for single and married filing separately individuals, $27,700 for those married filing jointly and qualifying widow(er)s — and $20,800 for heads of household.

If you are at least 65 years old or blind, you can claim an additional 2023 standard deduction of $1,850 (also $1,850 if using the single or head of household filing status). If you’re both 65 and blind, the additional deduction amount is doubled.

The TCJA made it possible for many retirees to skip the complicated process of itemizing deductions and potentially reduce taxable income greatly (at the expense of the previous $4,050 personal exemptions, which did the same). However, a reduced standard deduction starting after 2025 will significantly alter how much Americans will be able to claim, regardless of age.

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Estate Tax Deductions

The estate tax exemption jumped considerably in 2017, allowing taxpayers with sizable estates to benefit when transferring property to heirs. The Trump tax plan more than doubled the lifetime estate tax deduction from the 2017 value of $5.49 million for individuals up to $11.18 million. This higher limit, which allows property-holding families to transfer more money tax-free to their heirs, has increased each year since 2017.

For seniors currently benefiting from this deduction, the limit swells to $12.92 million in 2023. In 2026, the estate tax deduction will either return to the 2017 amount or be amended — depending on who ends up controlling the White House and Congress after the 2024 presidential election.

Charitable Contribution Deductions

By increasing the standard deduction and limiting itemized deductions, the TCJA had some adverse effects on charitable contributions. Charitable organizations are a major source of assistance to low-income seniors, so the potential reduction of this tax benefit may have impacted many retired individuals and non-profits.

Although the amount of charitable contributions that can be deducted has been increased from 50% of adjusted gross income (AGI) to 60%, a significant number of taxpayers who would normally itemize charitable donations has been reduced in favor of those using the standard deduction option (as a result of the TCJA, 87.3% of taxpayers claimed standard deductions in 2018, per the IRS).
www.irs.gov/statistics/soi-tax-stats-tax-stats-at-a-glance

comments

From reading the comments many don't realize the tax changes made during the last administration was only 5 years for the everyday taxpayer and the corporate tax reduction is indefinite. People might want to be angry about that. They knew most people wouldn't pay attention to the details. They wanted corporate taxes to be reduced.

Meaning Trump and Republicans knew that they only handed out a carrot to the working class for a short period of time and a full course meal to Corporations to feast on indefinitely.

-The tax cuts never helped the economy perform as they claimed it would with a GNP of 4 to 6%.-

-Trumps economy relied more on the success of Obama's growing and expanding Economy.-

-The promised average 4% raise never materialized except for a very small % of workers-

-The tax cuts did raise the National Dept-

Trickle down NEVER works for the working class but ALWAYS works for the wealthy. Trickle up would still increase the wealthy's income and would also help the lower and middle class but the wealthy would rather maintain the status quo.

On the whole, low-income families appear to have received the least savings, while high-income families saved the most. Middle-class families saw mixed results. The biggest winners from Trump’s tax cuts were probably businesses. Between 2017 and 2018, corporations paid 22.4% less income tax. The total value of refunds issued by the IRS to businesses also increased by 33.8% nationally.

The tax cuts for the wealthy ARE permanent; regular Americans - no.

Then why not make the corporate tax cuts temporary. Nope, it was all about giving the very rich a further advantage, all trump is for.

Many of the working and middle classes got tax INcreases in 2017/2018 (me, for example). Can I expect a tax DEcrease in the near future?

Nope, I had a tax increase as well due to the limit on what you can deduct in paid state taxes, with my contribution to the state far over the limit. That limit stays while my standard deduction goes down. trump at his finest, worst president in the history of the country!

Trumps tax cuts to Corporations is whats increasing the national debt.

(snip)

If not for the Bush tax cuts and their extensions —as well as the Trump tax cuts —revenues would be on track to keep pace with spending indefinitely, and the debt ratio (debt as a percentage of the economy) would be declining. Instead, these tax cuts have added $10 trillion to the debt since their enactment and are responsible for 57 percent of the increase in the debt ratio since 2001, and more than 90 percent of the increase in the debt ratio if the one-time costs of bills responding to COVID-19 and the Great Recession are excluded.

Facts don't work for you - eh?

Replying to MAC

'mac' is pushing the republican "Laffer Curve" lie, which D. Cheney, Donald Rumsfeld, and Arthur Laffer came up with, sketching it out on a napkin at a restaurant table in 1974, as a way to convince people that tax cuts for the rich were good. One only has to study cuts over time, against increases in luxury purchases to see what's going on (all numbers available online). The Laffer Curve has been in Economics textbooks since, and I debunked it every chance I had, as a 12-year college Economics Instructor. See the republican "Laffer Curve", including how it began, to learn about this big lie.

if you go back an look at the debt under presidents. You see Republicans starting with Reagan are the ones who added the most to the Debt. Time an again. They dont care about the debt. Except when the Democrats are in Office.

Always tax cuts for the wealthy from republicans. It's the only way the incompetents can get elected and re-elected. It's their quid-pro-quo with the rich. VOTE BLUE

The orange blob's tax cuts for the rich, added to bush's tax cuts for the rich, added to all other republicans tax cuts to the rich, have drastically reduced revenue. They need to be rescinded. Oh, and 'job' is a liar:

119.47% U.S. debt-to-GDP for Q2 2023—almost double early 2008 levels but down from the all-time high of 132.96% seen in Q2 2020.

If not for the Bush tax cuts and their extensions —as well as the Trump tax cuts—revenues would be on track to keep pace with spending indefinitely, and the debt ratio (debt as a percentage of the economy) would be declining. Instead, these tax cuts have added $10 trillion to the debt since their enactment and are responsible for 57 percent of the increase in the debt ratio since 2001, and more than 90 percent of the increase in the debt ratio if the one-time costs of bills responding to COVID-19 and the Great Recession are excluded.

Last Edit: Oct 9, 2023 23:50:54 GMT by the Scribe

CONSERVATISM: The Enemy Within (& Other Special Topics)

Trump Era Tax Cuts Are Set to Expire

Post by the Scribe on Aug 21, 2023 15:07:29 GMT

Post by the Scribe on Oct 9, 2023 23:33:19 GMT

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