What's Going on With the Proposed Tax Plan and Families Without Kids?
There is so much going on with the proposed Republican tax plan that we can be pretty certain that between the time this post was written and the time Congress votes on the bill , things will have changed again. But, looking over the basics, it becomes clear that the announced promise of reducing taxes for everyone is not entirely genuine. And, in the case of households without children, tax reforms as currently written may hit us harder than most.
On the surface, doubling the standard deduction for both single and married taxpayers sounds like it might reduce America's overall tax bill. Problem A : The removal of a variety of tax credits doesn't measure up to make the right difference.
In fact, under the current proposal, all individual tax deductions would be eliminated completely. The only exception will be deductions related to home ownership and charitable donations. Taxpayers wouldn’t be able to write off a variety of things such as state and local property taxes or medical expenses that are currently allowed.
At The NotMom, we know there are many childless and childfree women teaching and caring for the next generation of citizens. To do it well, they buy supplies out of their own pockets. Today, they can save receipts and write those vital purchases off. That ends if this reform package goes through.
"Let's say you are single with no dependents, and you have a moderate income. Currently, you get to take the standard deduction ($6,350) and one personal exemption ($4,050). If you are 65 or older, you also get to take an additional standard deduction ($1,250). That adds up to $10,400, or $11,650 if you're over 65.
The proposed Republican plan would replace all these provisions with a single deduction of $12,000 ($24,000 for married couples.)
That's a 15% increase — except for seniors, who get a 3% increase."
This also means that income will be taxed at a higher rate, 12% rather than the current 10%.
The plan isn’t a whole lot more favorable to families with children. The plan abolishes the exemption families can take for their children and replaces it with an unspecified general child tax credit.
Finally, one of the most baffling tax credits on the chopping block in the initial proposed reforms relates to adopted children. As if children who are adopted aren’t “real” children at al and worthy of the deductions available for kids raised by birth parents. Thankfully, after backlash from conservatives, the adoption deduction was restored.
I still don't know the end result -- changes to be made and votes taken -- but it appears that this tax plan isn’t overly friendly to families of any size, including and perhaps especially childfree and childless families of one or two.