5 Reasons You Could Owe More Under the Trump Tax Plan
The White House and Congressional Republicans recently came out with their proposed tax reform framework, and taxpayers want to know how the plan will affect them. Although details are still sketchy at this point, a number of policy advocates have taken the basic components of the outline and sought to determine the likely impact on what taxpayers will owe. The plan results in tax cuts for many people, but a substantial number of taxpayers could see their taxes go up if the proposal becomes law in something close to its current form.
One of the key parts of the Trump tax plan is its elimination of most itemized deductions. It specifically says that it will retain deductions for charitable gifts and for mortgage interest, but many other itemized deductions play a substantial role in reducing taxpayers' bills under current law. Although a rise in the standard deduction is intended to offset these lost deductions, it won't be adequate for everyone. In particular, the following five provisions could result in higher taxes for taxpayers.
The state and local income tax deduction has gotten the most attention from policymakers. That's partially because of its size, as it currently represents one of the largest itemized deductions that typical taxpayers take. However, the provision has stoked controversy because of the higher state and local taxes that residents in many traditionally Democratic-leaning states pay. Analysis of the impact of the Trump tax plan has found that residents of these states are more likely to face tax increases than residents of states with little or no state and local taxation.
Source: Fool.com
