Republicans’ $1.5 trillion tax cut basically only needs Donald Trump’s signature before it’s made official.
The new model passed the House and the Senate on Tuesday and early Wednesday.
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The massive package would touch every American taxpayer and every corner of the US economy, providing steep tax cuts for businesses and the wealthy, and more modest tax cuts for middle and low-income families. It would push the national debt ever higher.
The standard deduction used by most families would be nearly doubled, to $24,000 for a married couple, while those who itemize would lose some deductions.
Here’s what the new tax brackets are shaping up to look like.
New tax brackets for individuals
10% $0 – $9,525
12% $9,525 – $38,700
22% $38,701 – $82,500
24% $82,501 – $157,500
32% $157,501 – $200,000
35% $200,001 – $500,000
37% $500,001 or more
New tax brackets for married filing jointly
10% $0 – $19,050
12% $19,051 – $77,400
22% $77,4001 – $165,000
24% $165,001 – $315,000
32% $315,001 – $400,000
35% $400,001 – $600,000
37% $600,001 or more
But remember, these changes apply for when we’re filing for the 2018 calendar year. These won’t be used a guidance next Spring.
However, Trump declared last week that Americans will see ‘lower taxes and bigger paychecks’ starting in February.
The president made the announcement while urging Congress to give him a bill to sign before the holidays.
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He said: ‘I’m excited to announce that if Congress sends me a bill before Christmas the IRS — this is just out, this is breaking news — has just confirmed that Americans will see lower taxes and bigger paychecks beginning in February. Just two short months from now. Just got that. We just got that.’
Trump continued: ‘ This is for the people of middle income. This is for very, very special people. We are going to have a country that celebrates you again — hard working, great people. You’re being celebrated again, remember that.
‘Someone else called me the deplorables, we’re proud to be the deplorables. We’re going to make the American dream — and that’ll be the dream that you want for your children and your grandchildren.
‘If you make your voices heard, this moment will be forever remembered as the dawn of a great new American future.’
What are the main changes?
The corporate tax rate is getting slashed from 35 percent to 20 percent in 2019.
Companies can fully deduct business expenses from 2017 to 2022.
The level at which estate tax must be paid has jumped dramatically. Currently, heirs of estates valued more than $5.6 million must pay tax. The threshold has now increased to $11 million.
Child tax credit is increasing from $1,000 to $2,000 per child.
Pass-through businesses (where owners take a profit from the firm as income) will get a 23 percent deduction.
The standard deduction for married couples is now $24,000 and $12,000 for singles.
Taxpayers will be able to deduct up to $10,000 in state property taxes