It’s going to be interesting as people fill out their 2018 income tax returns. Last year’s Tax Cuts & Job Act passed with much hullabaloo: “Tax cuts for everyone!” I did some calculations then and figured I’d save a little bit in 2018, about $300 or so.
I wasn’t too far off the mark. I plugged the numbers from my 2017 tax program (H&R Block) into my 2018 program (H&R Block). Guess what? My taxes are $337 less under the Tax Cuts & Job Act.
What specifically brought about the $337? The Tax Cuts & Job Act eliminates exemptions and almost doubles the standard deduction. For me, the difference amounts to a $555 increase in my deductions, i.e. less taxable income of $555. The remaining tax difference looks as though my tax rate decreased a bit. Yippee! (Sarcasm there…)
So, will folks in my situation be happy with $337 given an increase in the federal budget deficit this past year to $883 billion? (Point of comparison: 2016 deficit = $585bn, 2015 deficit = $438bn, 2014 deficit = $485)
I am not happy; especially knowing that folks with more income are receiving bigger tax breaks, as are corporations. Given our “incredible economy” this past year I am even MORE unhappy as economic growth should mean a decrease in the budget deficit. No, the federal government still managed to spend more than revenue received.
$337 more in my pocket and an even worse financial picture in Washington than previous years.
What’s a taxpayer to do?