Here’s What the Senate Tax Plan Means For Your Income

If you’re having trouble following all the details of the competing tax plans, we can’t blame you!  It’s complicated.

But here is a very simple breakdown of what the plan would mean to YOU.

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From Yahoo Finance:

Senate Republicans are racing ahead with their version of the Tax Cuts and Jobs Act.

Currently, there are two different Republican tax reform proposals. The first version was introduced and passed by the House. Senate Republicans have laid out their own proposal, and on Tuesday the Senate Budget Committee voted to bring it to the full Senate for a possible vote.

The two tax plans will have to be reconciled into one before tax reform can be signed into law by President Donald Trump.

We previously calculated how much a single, childless taxpayer who claims the standard deduction might save on taxes in 2018 under the House’s plan, as well as how much a family of four might save.

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In the chart below, we ran the numbers to see how the Senate’s tax plan would affect a single taxpayer. We assumed the taxpayer is childless and will claim the standard deduction in both 2017 and 2018.

Tax savings under Senate Republicans’ tax plan

The estimates in the chart show how much single, childless taxpayers at different income levels who claim the standard deduction might save if the Senate’s tax plan becomes law:

• $25,000 salary: estimated annual tax savings of $369.
• $75,000 salary: estimated annual tax savings of $2,129.
• $175,000 salary: estimated annual tax savings of $5,240.

Tax savings under House Republicans’ tax plan

Our previous calculations using the House’s tax plan showed slightly lower savings for single, childless taxpayers who claim the standard deduction:

• $25,000 salary: estimated annual tax savings of $202.
• $75,000 salary: estimated annual tax savings of $2,078.
• $175,000 salary: estimated annual tax savings of $4,289.

Differences exist between the tax brackets and other details in the Senate and House tax plans, which will ultimately have to become one plan before tax reform can be enacted.

The Senate’s bill would allow single filers to deduct $12,000 — slightly higher than the current combined $10,400 deduction, which includes the standard deduction and one personal exemption. The House’s bill proposes a standard deduction of $12,200. Both plans eliminate personal exemptions.