Local accountants explain the new tax plan
Many of us can expect to see more money in our paychecks starting in February, and its all thanks to the new tax plan that was signed into law last month.
47ABC spoke with a local accountant to break down exactly what types of changes we can expect to see and who benefits from the plan.
The new tax plan is lowering personal income tax, meaning most people can expect to see more money in their paychecks come February.
Local accountants say, however, the tax plan still may hurt some.
Kevin Widdowson, a Staff Accountant at Tawes & Associates said, "We have to look at their tax returns, their sources of income and then hopefully it will benefit, but we can't guarantee that."
As for who the new plan is likely going to hurt more than help? Widdowson explained, "The individuals who have probably low home mortgage interest, people who pay a lot of income tax and state real estate tax, they're probably going to be hurt."
Families with an average income can expect to see the most benefit, and that's largely because child tax credit is doubling.
Widdowson said, "There's the doubling of the child credit. If you have a child under 17, currently it's $1,000 for 2017. In 2018, it will be $2,000."
As for businesses, they can expect to see a positive change in their tax rate. Before, they were paying anywhere from 15% to 35%.
Widdowson said, "That is now going to a flat rate of 21 percent."
This means big businesses will be seeing big benefits in 2018.
"The lowering of a rate is going to be a big step and then there's other items in there that will benefit other corporations that bring their business back in, yes," Widdowson said.
Local accountants say most of these new items are going to sunset in the year 2025.
This means it's going to change and go back to the original tax plan, so these changes are temporary.