A look at the GOP tax bill - WFSB 3 Connecticut

A look at the GOP tax bill

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After months of political fighting, the president's tax reform plan is a done deal.

Both chambers sealed the deal today, and many are still trying to understand what this means for families.

The one thing we keep hearing is this tax reform plan is not simpler, but that it's much more complicated.

"They are different. I would not say they are radical, a lot of these ideas have been floating out there for a while,” said Brian Newman, who is an accountant with Cohn Reznick in Hartford.

He said he’s still learning the details of the tax reform plan.

While many middle-class families will be getting a tax break on some things, they will also be paying more for others.

Here are some of the pluses for a family earning $100,000 a year:

  • There will be increased state deductions $12,000 to $24,000 (for those who don't itemize)
  • They will have lower taxable income, which means more income taxed at a lower bracket
  • Those families will get a larger tax credit, $1,000 to $2,000 per child

However, Connecticut families could be adversely impacted because CT is a highly taxed state.

There will be a $10,000 cap on deductions, and that's not a lot when you add up property taxes, car taxes, and state income taxes.

Higher income families, those earning $400,000 a year or more will lose some of their larger deductions and will have a higher tax rate.

The Republican tax plan primarily gives tax breaks to corporations, something Democrats have criticized.

There is, however, a deduction that could help companies including those in CT grow. If they purchase large equipment, it can be a tax write off but only if that equipment is bought after Sept. 27 this year.

"We are now going through the process of going over this bill. It’s over 1,000 pages long with the committee report and deciphering it and going to our clients to see how it will affect them,” Newman said.

Not all companies get the same benefits. Manufacturers make out better than lawyers and even accountants.

These changes will take effect in next year's tax returns.

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