I am 73 years old, living on a fixed income and solidly middle class. Imagine my excitement when President Trump started talking about a “cut, cut, cut” tax reform package.
Then he recently announced that he will be giving the middle class a Christmas present in the form of tax cuts! I couldn’t wait until Christmas to meet with with my accountant to decipher the glorious magnitude of this pending gift, so I sat down with her.
I wish I could re-gift Trump’s Christmas offering. My itemized deductions generally round up to $15,000. Both the U.S. House and Senate packages make me a loser on this score alone.
One package allows for mortgage interest deductions for mortgages up to $500,000, the other repeals them entirely. These affect the marketability of my home, and both gut itemized deductions to the point that I will be stuck with the approximate $12,600 standard deduction.
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I lose the $4,000 exemption. I will be paying taxes on approximately $6,200 more of my fixed income.
Republicans may be so frantic to get “something done” that a perfect storm is created with unintended consequences.