Corridor reaction to Trump Tax Code changes
CEDAR RAPIDS, Iowa (CBS2/FOX28) - Tax preparers and lawmakers in the corridor are busy pouring over the pages of the new Trump Administration tax code proposal to see what it might mean for clients and constituents. Kirkwood Community College Accounting Professor Peggy DeJong says it will take time, but there are some changes that stand out.
Top on the list, the increase in the standard deduction. Under the new bill it doubles to $12,000 for a single filer and $24,000 for a couple. Professor DeJong says she expects it would mean fewer people itemizing their deductions. She says simplifying the tax code to the point where a return could fit on a postcard, as the administration has claimed, is certainly a plus, but many people have used donations as deductions and that could impact local charities, “ It would be an interesting study to see if they really feel like that deduction spurs giving or if it’s more ‘ oh we gave, we might as well take the deduction.’”
In Marion we showed shoppers on the street the reduction in tax brackets from seven down to four and the proposal for standard deductions and asked if they felt they would be better off under the new bill? Some admitted they don’t know their tax bracket. One couple smiled and remarked it would save them a lot over last year’s tax bill. Still others shook their heads and said they will just have to wait and see if it ends up being advantageous for them.
The administration did stay away from any mention of a controversial cap on 401-K contributions, but Professor DeJong says right now it’s important to keep in mind that the proposed changes in mortgage, medical and other deductions are a work in progress. She says after lobbyists and loopholes the final bill presented to congress may look much different.