The Two Groups That Have The Most To Lose From The New Tax Bill

Although many people, myself included, doubted it would happen,
the Senate passed the Tax Cut Bill. Big changes are
coming to the tax system, although all the details still need to
be hammered out. These changes will affect billions of
Americans and it will affect all of us either positively or
negatively.


It’s impossible to walk through every possible scenario, but
there are two main groups that will lose out the most from these
proposed changes.
Big changes are coming to the tax system, although all
the details still need to be hammered out.

The main change we can expect is that the standard
deduction will be doubled. You’ll notice if you look at
your previous tax returns, that you either take a standard
deduction or use itemize deductions. The average married couple
right now can deduct $12,000 from their income, and with this new
plan they could deduct $24,000. This means most people won’t
take itemized deductions, such as gifts, tithes, mortgages and
student loan interest in the future, as they'll get more money
back by taking their standard deduction.


The first group most affected by these changes are those worried
about not being able to deduct mortgage interest, including
realtors, home builders, mortgage lenders and others in that
industry. This group doesn’t worry me very much. Deducting your
mortgage interest won’t affect the average person, as you
still benefit from the higher standard deduction. The main reason
this doesn’t concern me is that you should never be purchasing a
house for the tax benefits. Always purchase a home you
can afford and let the deductions be a fringe benefit.


The second group affected by this change in deduction, though,
makes me worry. People often use charity donations,tithes and
similar expenses to itemize their deductions and increase their
tax returns. Without the incentive of these deductions,
will people give as freely to charities now? Traditional
conservatives don’t believe the private sector needs an incentive
to donate, but history suggests otherwise.
Without the incentive of these deductions, will people
give as freely to charities now?

I want to believe we’ll see just as many donations if not more in
the upcoming year despite these changes. Many of my favorite
clients are those who come to me not because they want to get as
much money as possible, but because they want to know how to use
their wealth effectively to help the world around them. They’re
not always wealthy clients either. I recently had a middle class
couple who was just barely saving money, but came to me to see
how they could find a way they could use what little extra funds
they had to give more to others.


I can help you do the same with your money and together we can
ensure our local charities and organizations don't suffer under
this new tax code. We can discuss not just how to make
you money, but how to help you give the way you’ve
dreamed.


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