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Arlene Rheinfelder, EA, CP AZCLDP

"I help solve people's problems. There is nothing more rewarding than helping someone through a difficult situation, and helping them to find a good resolution." 

 

Melissa Hill, AZCLDP

I love the challenge of finding a way to help each person's unique situation. It is never the same because each person is different with their own needs and wants.

Crunching Tax Numbers

Tax Reform or Is it?

The House just passed their version of "tax reform" and sent it to the Senate. The Senate has its own version of tax reform.  The end result will likely be a compromise between the two.  Both agree on certain issues, such as increasing the standard deduction and removing the personal exemptions.  Both have major changes as to the ways that small businesses will be taxed. Most are not taxed at the business level now, but are taxed at the individual level on the owners' tax returns.

We've heard the idea that it will be possible to file on a postcard since before the last Presidential election. The last proposed postcard form that I've seen actually made me laugh because it failed to take many things into account.  However, the complexity of some of the proposed reforms are not funny.  This latest attempt at reform falls short of true reform. It is a tax change, not true reform. For years, I've said that the tax code needs to be simplified.  In some respects, for those with one W2, these bills will simplify matters.  That is good. However, for many of us, it will magnify the current complexity.

One interesting note on the House bill is that it reinstates a marriage penalty.  Typically for those filing jointly, the amounts for a single filer are simply doubled. However for joint filers income above $260,000 is taxed at 35%. We would normally expect that the transition to 35% would be double the amount of singles, or $400,000. I hope this issue is resolved in the final version of the bill.  The National Association of Tax Professionals has done a side-by-side comparison of both bills. 2017TaxCutsJobsAct HouseVSenate

Image by iqconcept licensed by 123rf.com.

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