The Tax Bill Passed: Now What?

Much to the surprise of many people, including myself,
the GOP Tax Bill Passed and big changes are coming to our tax
system in 2018. There’s lots of rumors and
misinformation going around about what these changes will be, so
let’s dig into it. This bill isn’t perfect, but there are some
great benefits we can all enjoy.
Much to the surprise of many people, including myself,
the GOP Tax Bill Passed and big changes are coming to our tax
system in 2018.

The first most important element that will affect most people is
the doubling of the standard deduction, which we’ve talked about
before. With the doubling of this deduction, it’s going to make
sense for most people to stop itemizing. My suggestion to
those who love itemizing? Get creative this year
and itemize as much as possible.


Accelerate your charitable giving. Do you give a monthly tithe to
your church? Go ahead and pay for January and February before the
end of the year. Your church won’t mind getting the money
upfront and you’ll still be able to deduct that money for your
2017 taxes. Have you been thinking about donating your
old, beat up car? Do that now! Anything you can deduct this year,
take advantage of it.
Your church won’t mind getting the money upfront and
you’ll still be able to deduct that money for your 2017
taxes.

This bill has increased the controversial estate and death tax as
well. Previously, a married couple with an estate of over 11
million would get taxed 40% on any amount over that 11 million
after their death. That limit has now been doubled to 22 million.


One of the changes  I’m most excited about is the expanded
use of 529 Plans. If you have children, you’re probably familiar
with a this plan, which is an education savings plan that has a
big tax benefit. Previously, the 529 plan could only be
used for colleges, but that’s been expanded to apply to all
education, including private elementary, middle and high
schools. This is great because now parents and
grandparents can set up these savings accounts to help their
children attend better schools.
The majority of people will see a large tax cut this
year which is good and bad.

Finally, the majority of people will see a large tax cut
this year which is good and bad. We’ll see a benefit
immediately, so what’s the problem? These tax cuts are set to run
out in about ten years because we can only cut a certain amount
from the national deficit to fund this, which brings us to be the
elephant in the room: government entitlement programs which
includes social security.


I’ve gotten a lot of flak in the past for lumping social security
in with entitlement programs, especially since we all pay into
social security. But overall, this program contribute to half of
our deficit. The social security system we have now is failing.
We as a country and as a society can’t allow it to continue on
as-is. I definitely agree with and empathize with those who say
that they deserve to keep the program because they’re been paying
into it, but that’s the same as someone on the Titanic
saying “I paid for my ticket, I deserve to get to New
York.” I agree with you, it’s not fair, but the ship is
going down and something going to have to give. While I doubt
anyone will vote to get rid of social security completely, we do
need to find a new system that works long term and that may be a
conversation you can expect to see in 2018.
It’s crucial to evaluate your situation early on,
because big changes are coming.

We’ve gone over just a few of the basics here, but you probably
still have a lot of questions about how this bill will impact
you. I encourage you to sit down with a financial planner and
look over everything. It’s crucial to evaluate your
situation early on, because big changes are coming.


Please know your situation. You can ask any question through the
link below, and I will personally respond. You can also sign up
for a free consultation with me so we can get a look at your
situation.


 


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