Breaking Down The New Tax Plan Ahead Of Tax Season

Posted at 10:34 PM, Jan 03, 2018
and last updated 2018-01-03 23:34:58-05

President Trump as tauted the GOP tax plan as a "giant tax cut for the middle class" and we're learning in the coming years a lot of filers will likely see some type of tax cut, but not everyone will be so lucky. 

"There will be little pieces of winners and losers throughout the tax system," said tax specialist Jerry Moss.

Moss is a certified public accountant with Kraft in Nashville. He and his team plan on working longer hours through April.

"Everybody wants to know how they will fair under the new system and that's a challenging question that requires client specific or business specific calculations," Moss explained.

However, generally speaking, "I think the general population will see some overall decrease in tax," he said. 

The tax bracket change is one of the biggest differences in this new plan. Individuals who make enough to be in the top bracket will see a nice tax cut. "The top bracket has reduced from 39.6 percent to 37 percent for individuals," said Moss. 

Charitable deductions are also changing. "In order to benefit, all your itemized deductions now need to exceed $24,000," Moss said. 

By doubling the standard deduction from around $12,000 to $24,000, fewer people may end up itemizing deductions, meaning fewer would take advantage of the charitable tax break.

Moss said most of these changes, especially for individuals will have a limited time period. 

Small business owners will see a lot of changes in the new tax plan which includes bonus depreciation. This new law will allow businesses to deduct 100 percent of their expenses for the year, both on new and used equipment.