Episode 53: The Impact of Trump’s Tax Reform

trump tax cuts

The Tax Cuts and Jobs Act of 2017 has been signed into law by President Trump.  Will we be making changes in how we spend, save, and give?  John and Devin get into some of the high points of the tax reform and how it may impact your income tax liability.

This bill will simplify tax filing for most people.  More people will take the standard deduction, which means less paperwork. One study estimates that 94% of tax filers will now take the standard deduction under the new tax laws. More people will take the standard deduction because:

  • the standard deduction has doubled
  • some deductions have been limited
  • some items can no longer be deducted

Personal exemptions have been eliminated. This may hurt larger families, but this change may also be offset by the lower tax rates and the larger and more available child tax credit.

The bill includes major tax changes for smaller business owners. John explains the big-picture implication of some of these changes, and what you need to do now to be sure you are in the best possible tax situation next year.

Highlights include:

  • The difference between a credit and a deduction
  • How this tax change should impact your plans to divorce
  • How to know if your CPA is giving you good advice
  • Why you might want to move to Texas

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Once a month, Devin and John answer questions submitted by listeners.  If you have a question for a future Listener Questions episode, submit it to questions@bigpictureretirement.net.  We can’t get to every question, but we sure do try to hit the big issues that help the most people.