WS Chronicle

Ho, Ho, Ho! Merry Christmas. The American people received a trillion-dollar tax present from the GOP Congress and President Donald Trump starting in the 2018 tax year. They call it a tax cut. It’s really an anti-middle-class present.

It’s also confusing and secretive. Many Americans thought they were getting a handle on things when they paid their state and property taxes early, in 2017, hoping to get a leg up on one of the items in the law: a cap on the amount of state and local taxes people can deduct.

But wait, there’s more! The law has more goodies.

The blog “Tax Reform and Your Taxes” from The Tax Debt Solution website (www.thetaxdebtsolution.com) reveals some items that were not widely publicized about the

Tax Cuts and Jobs Act (H.R. 1). (The blog suggests that you look at your 2016 tax return to follow its information.)

For instance, in the past you were able to deduct a personal exemption amount for yourself, your spouse (if married filing jointly), and anyone who you could claim as a dependent. For 2016 and 2017, that amount is $4,050 for each person. Under the new law, the deduction for exemptions has been eliminated starting in tax year 2018.

How does this affect the final tax to be paid? That item has allowed a huge amount of money taken off before taxable income is calculated.

Also, under the new tax law, the standard deduction amounts are almost doubled, and the itemized deductions allowed have been scaled back. Some itemized deductions have higher caps, such as the deduction for charity contributions, but how do the lower and higher caps mesh with the higher standard deduction and the deductions usually taken?

For instance, those married filing jointly will have a standard deduction of $12,700 for the 2017 tax year while it will increase to $24,000 for the 2018 tax year. If a couple does not have $24,000 in itemized deductions and takes the standard deduction, will the couple opt not to donate any money for tax year 2018 because the couple will get the write-off anyway at the $24,000 standard deduction level?

And now that the Obamacare mandate to have health insurance has been eliminated in the law, will that paperwork be eliminated, also?

No doubt the law has Americans scrambling to figure out what to do.

There are winners and losers under this law, and it appears that the middle class, and maybe even donations made by the middle class, will suffer.

Thanks, GOP Congress and President Donald Trump. Ho, Ho, Ho!