The tax law legislation vote looms large in the near future even as we anticipate the largest winter holidays of the year. On Sunday, President Trump referred to the tax bill as one of the best holiday gifts the government has ever given to the middle income people of America.
It’s like a mysterious present. Many questions are still boxed up and wrapped up with 500 pages of detail. Soon we will know more about the new laws. Our Gavrilov Tax Squad is anticipating many questions. They are prepared.
Tinsel, Time and Tax Vote
Meanwhile, the American people decorate, shop and bake. They are busy with all their preparations for Holiday visitors. At the same time, law-makers have worked on legislative last minute adjustments.
Even as we publish this blog, the votes in the House of Representatives have tallied to the passing point. The scene on the floor was right out of a movie with cheering and applause. Later we expect to see similar excitement in the Senate and as the President signs the largest tax reform bill in history.
The Legislation Has Already Ignited High Anxiety for Potential Homeowners, Especially Coastal Areas of the US
In spite of the federal tax cuts, potential homeowners have a lot of questions. They involve the concept of home ownership in the face of losing some of the tax benefits for owning a house. So, let’s take a point-by-point look at the new law:
Legislation Concerning Home Interest Deduction
1. In case you are not aware, under the new tax plan limits deduction for home interest. “New homebuyers would only be able to deduct interest on the first $750,000 of mortgage debt on a newly-purchased home.”
2. Be aware that the current cap is $1 million. Back in November, the House tried to make it $500,000, but their deal fell through.
3. How much the change from a one million to a $ 750,000 cap worries you depends on two things. It depends not only on your income, but on the locality in which you buy that home. “For instance, in New York City, nearly 64% of mortgages on homes sold this year were over $750,000, according to data from ATTOM Data Solutions.”
A ‘Truth is Stranger than Fiction’ Note:
4. The House voted for the tax bill, 227-203, on Tuesday -afternoon. Although we hear there will be a recasting of the House vote for technical reasons, the Senate will surely pass it. This is to the dismay of Rep. Lee Zeldin, R-N.Y., who stated, “Getting this bill done and getting this bill done right should not have been a binary choice.” He is concerned that the $10,000 cap on the deduction taxpayers can claim for the state and local taxes (SALT) will hurt New Yorkers.
Without going deeper into the politics still in play, Gavrilov & Company believes you need to be prepared.
5. True, New York homeowners and all the coastal residents will still get their tax-cuts and deductions. But we re-iterate, they won’t be deducting all their state and local taxes from their tax bill. Like states in mid-America, they will not get to deduct more than $10,000.00 from the high dollar New York local taxes.
6. Again, we repeat, we are gearing up to help you decipher the changes we know are coming. Read on, below:
New Legislation Limits Property Tax Deduction, No Matter Where You Live
As noted above, if you live in high-tax states, you will not like the tax limitations. The new legislation only allows you to deduct up to $10,000 in state and local property taxes plus income or sales taxes.
Taxpayers will no longer be able to fully deduct state and local property taxes plus income or sales taxes.
Citizens who live in states that levy high taxes like California, New York or New Jersey, you will pay more taxes to your local and government than states with lower rates.
Can We “Trump” the Tax Legislation with Tax Credits: Some Solid Numbers For You
President Trump believes the boost of a bigger individual deductions and a revitalization of American businesses will off-set changes in rules for property tax deduction.
By the way, here are some very important numbers. They are dear to the hearts at the white house, and maybe your heart also:
In the new legislation: The law increases “the refundable portion of the child tax credit to $1,400.” This is “thanks to Rubio’s insistence. The overall child tax credit will increase from $1,000 to $2,000.”
Likewise, the tax package almost “doubles the standard deduction.” It increases from “$6,350 to $12,000 for individuals and from $12,700 to $24,000 for married couples filing jointly.”
Take home pay boost vs tax cuts for wealthy
However, many observers wonder if the boost in the “take-home pay and a possible surge in the economy from these numbers are worth bigger debt-financed tax cuts for the wealthy and corporations.”
And those debt-financed tax cuts for the higher income bracket and the corporations will undoubtedly be the focus of another blog or maybe several more blogs.
Unlike some news sources, we do not like to print out details until we have all the facts. Many of these facts are still packaged in the hundreds of pages. as yet to be released. legislation.
Chances are, you might already know about these worries. What we really worry about are the details that lawmakers have not yet revealed. We plan to be aware of all the business secrets of the 500 page tax legislation as of the end of December.
New Legislative Message Just In
In a Midnight Vote, the senate passed the reform bill. “The Senate voted 51-48 in favor of the bill. ” However, certain concerns arose. Result, the House will have to conduct a 2nd vote on the bill.
Moving On–to a Special Edition, Tax-Fee Seasonal Message: Happy Holidays!
On a personal note, Gavrilov congratulates you and your families as you celebrate the special season of Holidays ahead. Hopefully, the Happy Holiday Time will connect you in warmth and joy with family and friends.
There could be no better time to send out our joyful greetings everywhere. Likewise, we send our genuine appreciation to friends, colleagues, clients and supporters here in New York City.
We genuinely recognize and thank you, all, old friends and new. We value your friendship, trust and business. Without it, we could not enjoy attainment of our success. Happy Holidays from Our Family to Yours!
Advice To Last Minute Shoppers
In celebration of all those last minute holiday shoppers out there, we offer a quotation of a little verse. We consider this to be a perfect accountant’s holiday shopping list. These items are right on budget with or without tax-cuts, but expensive in their own way:
This Year, Give:
“To your enemy, forgiveness.
An opponent, tolerance.
A friend, your heart.
A customer, service.
For all, charity.
To every child, a good example.
To yourself, respect.”
– By Oren Arnold