Here's who wins under Trump's tax law



Let's start with the big one. Although most Americans pay less overall taxes, many were surprised to find that their repayments had barely changed or were falling, which gave them the impression of being lost, even if they still won.

You will find below other ways to determine who wins and who loses in the face of the law. And please take note: It is possible to both win and lose at the same time.

Just under 30% of filers will see very little change in their tax obligations and a small percentage, about 6%, will see an increase. These tax rate reductions for individual filers are not permanent like corporate tax cuts, but will be in effect until 2025.

But while most Americans have had a tax break, most people do not seem to understand that they have one. According to a NBC News / Wall Street Journal poll released this week, only 17% of Americans think they benefit from a tax break, while 28% said they would pay more.

Winner: most rich people

The benefits of the new tax law favor the rich, who will generally enjoy greater benefits than other Americans.

the According to the Tax Policy Center, a think tank suggests that people who pay the most taxes pay the most taxes, which suggests that taxfilers between the 95th and 99th percentiles of income, between $ 308,000 and $ 733,000, the largest benefit as a part of after-tax income.

According to this report, most people with the lowest incomes (20%) will see little or no change in their tax obligations.

Losing: Rich people, probably in the blue states

About 14% of the wealthy earning more than a million dollars will see their tax increase. They are likely to be concentrated in high-tax states and local governments and possibly several houses. Previously, they were able to deduct much more state and municipal income taxes from their federal returns. Now, these deductions are capped at $ 10,000.

But the ceiling on deductions is likely to affect those hardest hit by the top 1% of those in those states, even though some people will be affected at all levels of income.

Really winner: the heirs of the rich

The law has more than doubled the amount that can be transferred to family members without triggering estate taxes, from about $ 5 million to more than $ 11 million for individuals and $ 22 million for married couples. This concerns a relatively small number of Americans, but that means that they will be able to retain more than one area.

Always win: investors

Capital gains tax rates have not changed in the tax law and remain below the wage income rates. Thus, people who earn mainly money on their investments will continue to pay less tax than those who depend mainly on wage income.

Earn: Trump, perhaps, although other business owners do not earn as much

Most small business owners (and many small business owners) include their profits in personal tax returns instead of paying as corporations. Trump is probably among these, although it's impossible to know since he kept his tax returns from public view.

Under the law, which the IRS clarified in January, certain types of business owners benefit from a 20% tax deduction. However, doctors and lawyers have lost this exemption, as have owners of Major League Baseball teams.

Winner: red state filers who depend on refunds

According to preliminary data from H & R Block, it is mainly the red states, those who voted for Trump in 2016, who are getting the biggest rise in tax refunds.

Losing: blue filers who depend on repayments

Preliminary data from H & R Block show that all states with lower repayments are in blue. Of course, the experts say you should not aim for any refunds or tax bills on tax day. But many Americans rely on repayments as a kind of forced savings plan.

In H & R Block's preliminary data, some of the states with the largest tax cuts to pay are blue states imposing high national and local taxes, such as New Jersey, California, and Massachusetts. Tax filers in these high-tax states earned on average some of the largest tax cuts. They also experienced some of the largest average decreases in repayments.

Losing: People who thought that a tax break would mean a bigger refund

According to preliminary data from the 2018 tax season of H & R Block, one of the country's largest tax preparers, the average number of tax returns that & # 39; 39, they have processed to date shows a decrease of 24.9% of the tax debt. But because of the way the IRS has changed its withholding on the paycheck, this reduction has been spread all year round and the refunds have barely budged.

The government has paid $ 6 billion less in repayments until March 29, according to the IRS, although the average repayment, according to its data, is $ 2,873 and has decreased by less than 1% compared to last year.

Losing: People who do not get a refund but who may think that they would do it

The government is paying fewer refunds this year under the new tax law, according to preliminary IRS data on deposits up to March 29. According to the IRS, repayments were 2.2% lower than last year, but only 1.4% fewer returns processed.

Win: people make their own taxes

According to the March 29 IRS report, the number of electronically filed tax returns increased 2.3%. The number of visits to IRS.gov has increased by more than 358 million this year. . That said, the new tax law preserves the deduction that people can take to hire an accountant (assuming they do not take the standard deduction).

Winner: people who take the standard deduction

Taxes should become easier since the standard deduction almost doubled to $ 12,200 for individuals and $ 24,400 for married couples. This means that most Americans will not detail their tax returns and that capping national and local tax deductions may not affect as many people as they feared.

Losing: Washington, DC, reporters

The capital has the largest average drop, at 6.1%. It also records the smallest decrease in the average tax debt, 18% – which is certainly a reduction, but the lowest, on average, of the country.

Earn forever: businesses

They obtained a massive rate reduction from 35% to 21% starting in 2018, which is permanently registered in the new law.

Losing: the US Treasury

Because of all these tax cuts – and especially corporations – budget deficits are expected to skyrocket from $ 1 trillion a year starting in 2022 and staying there. With a national debt of more than $ 22 trillion, this means that the United States will have to make difficult choices. So enjoy this tax break, everyone.

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