Trump’s Tax Cuts Almost Permanent — Here’s How They’ll Affect You

See how Trump's tax bill changes the standard deduction.
  • The House pushed through Trump’s tax cuts bill; the Senate is expected to vote later this year.
  • Unpopular among Democrats and voters, Trump’s tax bill is accused of favoring corporations and the wealthy.
  • With the proposed changes, the standard deduction would be doubled to $12,000.

Congress voted 220 to 191 in favor of the Trump tax cuts bill for individuals and small businesses on Sept. 28.

House Democrats and polled voters alike are opposed to the tax bill and cite that it’s in blatant favor of corporations and wealthy Americans and leaves low to middle-income Americans left with modest tax cuts. The American public is lukewarm about the bill and less than 40 percent of voters support the tax law, reported Bloomberg in September 2018.

Click to see how Trump’s tax cuts just put $55 billion back into shareholders’ pockets.

Here’s an at-a-glance summary of the proposed changes:

  • Tax rates would be lowered.
  • The corporate tax rate is slashed from 35 percent to 21 percent.
  • The standard deduction is doubled, meaning that a single filer’s deduction jumps from $6,350 to $12,000. For married couples filing jointly, it increases from $12,700 to $24,000.
  • Personal exemptions are out. Families with a lot of children are likely to pay higher taxes. The tax deduction for each person claimed — which was valued at more than $4,000 in 2017, according to CNBC — is out.
  • Several itemized deductions are out. Moving expenses (except for active military personnel) and fees and certain alimony payments are no longer permitted deductions.
  • Mortgage interest deduction is limited to the first $750,000 of a loan taken out after Dec. 14, 2017. This doesn’t apply to certain current mortgage holders, but interest on home equity loans are no longer deductible.
  • Obama-era laws like the penalty on those without health insurance are repealed beginning in 2019.

Find Out: 10 Trump Tax Plan Tips for Homeowners

Residents in the typically liberal-leaning states of California, New Jersey and New York — where taxes are already higher than the rest of the country — would be hit the hardest. Should the bill become a law, those residents should be prepared to see significant increases to their federal taxes because of the $10,000 cap on state and local deductions.

Don’t Miss: 4.5M People Need to Adjust Their W-4s Now to Avoid Paying More Taxes

Unsurprisingly, the Congressional vote mostly aligned with party lines. Senate Republicans have been preoccupied with pushing through Brett Kavanaugh’s Supreme Court appointment, but the tax bill is expected to go to vote by the end of the year.

Click to keep reading about tax write-offs you don’t know about.

More on Taxes