Find out If the Tax Bill Will Affect You
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5 min. read

Find out If the Tax Bill Will Affect You

2/05/2018

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Tax season is officially here. It comes yearly like clockwork and it’s always filled with plenty of emotions. This year, there’s a new element to the usual experience: the passing of the Republican tax bill. So what does this mean for you?

 

  • If you have kids, you’re likely to receive more help (the child tax credit would increase to from $1,000 to $2,000), but there are new restrictions to the bill. Each child should have a Social Security number in order to claim the refundable and nonrefundable portions of the credit. Also, the bill has tax benefits available for private school children by allowing parents access to a 529 account to save for tuition. Public school attendees will see no direct impact.

 

  • Planning to buy a home? Great - the bill kept the mortgage interest tax deduction to your benefit. However, it reduced the limit of interest on a mortgage from $1 million to  $750,000 to be deducted. Also, if your state has high property taxes like New Jersey, Illinois, and Texas, you can’t deduct over $10,000 in property taxes any longer. Not planning to buy a home? There’s not much impact for you.

 

  • Health insurance premiums are likely to go up. The bill gets rid of the Affordable Care Act’s individual mandate which requires everyone to buy insurance or pay the consequences through a penalty come tax season. Good for people who would have had to pay the penalty, bad news for the healthcare market in general.

 

  • Living in high-tax states like California, New York, and Connecticut means that the above cap on property taxes also affects either income or sales taxes, limiting the total permitted deduction to a combined $10,000. Sorry to say that people in high-tax states and cities would most likely pay more.


For more information regarding your own particular tax situation and how the tax bill will affect you this tax season, reach out to your tax advisor. For further ways to plan and improve your financial habits, consider opening an IRA or investment account today. By setting aside a small portion of your salary today, you’re already investing in a better future for yourself and your family tomorrow, and it only takes 10 minutes to open your account.

 

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This material is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The information and opinions contained in this post are derived from proprietary and nonproprietary sources deemed by Finhabits to be reliable, are not necessarily all-inclusive and are not guaranteed as to accuracy. As such, no warranty of accuracy or reliability is given and no responsibility arising in any other way for errors and omissions (including responsibility to any person by reason of negligence) is accepted by Finhabits, its officers, employees or agents. This post may contain “forward-looking” information that is not purely historical in nature. Such information may include, among other things, projections and forecasts. There is no guarantee that any forecasts made will come to pass. Reliance upon information in this post is at the sole discretion of the reader.

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