Much of the news surrounding Congress’ new tax bill has focused on politics — but what does it mean for you as a taxpayer?
In condensed form, here are some of the changes and how they’ll affect the consumer’s wallet. Congress is expected to vote on the measure in coming days.
New tax brackets
The bill would make changes to tax brackets and lower rates. For example, the top rate would drop to 37 percent, from 39.6 percent.
Most taxpayers would likely see a little more money in their February paychecks as a result of those changing brackets, though the bill would also eliminate personal exemptions, said Jeremy Scott, vice president of editorial at Tax Analysts, a nonprofit, nonpartisan publisher on tax policy and practice.
That credit would apply to any federal income taxes a family owes, or, if a family doesn’t owe any federal income taxes, it could receive refunds of up to $1,400 per child from the government, said Geoff Harlow, a tax partner at Kessler Orlean Silver and Co. in Deerfield, Ill.
Property tax deductions
The new bill would limit to $10,000 the amount of state and local taxes, including property taxes, that can be deducted annually.
People who bought their homes before Dec. 15 would still be able to deduct interest on mortgage debt of up to $1 million. Those who bought homes later, however, would see that amount lowered to $750,000.