Saturday, November 12, 2016

Trump won the election : Did I just take a pay cut? -- Part 1

It has been four days since the election that will bring President-elect Trump to power and, like many who consider themselves to be on the more liberal side of the political spectrum, I've been fretting over all of the things that we have lost and the many ways in which our lives may change.

This morning, a Facebook friend shared that she had just learned that her income taxes as a single mother of two school-aged children would go up under the Trump tax plan.  


Up until this point, I hadn't even thought about the ramifications of the Trump tax plan on my own family's bottom line or that of my friend's I decided to learn as much as I could about his tax plan, when it might affect my family... and by how much.

Firstly, I realize that rewriting the tax code is not something that the President does alone.  He would work with the Republican-controlled Congress to make tax reform happen.  President-elect Trump's platform did include a tax plan that would attempt to simplify the current tax code. Instead of seven income tax brackets, we could go down to three.
Source: (11-12-16)
And then, there would be a different standard deduction:

Source: (11-12-16)
But he would also eliminate personal and dependent exemptions as well as the "head-of-the-household" filing status.  Both  and Forbes Magazine agree that this could have major implications for all single parent families.  For instance, a single mom with one child would have a standard deduction of $15,000 rather than a total deduction of $17,600.  She would have to pay taxes on an additional $2,600.00 

But what about my own family?  How will our own tax bill change? This question has me looking over my last tax return, my current pay stubs, and predicting what Trump will be able to pass through Congress in the future.  Part 2 of the answer to my question is coming soon. 

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