Trump's tax plan: American family will save $ 1,182 per year in taxes

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Republican congressmen on Thursday announced a number of changes that they want to make to the US tax code, in particular - to reduce taxes for corporations and to reduce the number of tax categories for individuals.

“With this plan, a typical family of four will save $1,182 a year on their taxes,” House Speaker Paul Ryan, a Wisconsin Republican, said at a Capitol Hill news conference.

Ryan suggested the money could go toward paying "a year's worth of gas for your car" or phone bills, "depending on how much data your kids use," he said with a grin.

In the White House, President Trump presented the changes like this: “My administration will work tirelessly to fulfill our promises to the workers who build in our country and carry out historical tax cuts ... - space fuel, thanks to which our economy will rise to unprecedented heights” .

Major changes:

1. The Republican plan calls for reducing the current seven tax rates for individuals to the following five: 0%, 12%, 25%, 35% and 39,6%.

The authors of tax reform decided not to change the maximum tax rate on income for individuals. It remains at the level of 39,6%, but will be applied to families whose total annual income exceeds $ 1 million. For comparison, earlier this tax rate was applied to families with a total annual income of more than $ 470 thousand.

A family whose annual income is between $260 thousand and $1 million will pay 35% taxes; if the total family income is $90 thousand - $260 thousand - 25%, and a family with an annual income of less than $90 thousand - 12%.

For single US citizens: the rate is 39,6% for annual income of more than $500 thousand, 35% for $200-500 thousand, 25 for $45-200 thousand and 12% for less than $45 thousand.

2. The amount of the standard tax deduction has been almost doubled - unmarried Americans will now be able to deduct $12 thousand from their taxes annually instead of $6,350 previously, spouses filing a tax return jointly - $24 thousand versus $12,7 thousand.

3. Homeowners will be able to write off interest on a mortgage of only $500 from their taxes. Previously, they were allowed to write off an amount equal to the interest paid on a $1 million mortgage. This measure will primarily affect residents of expensive cities - New York, San Francisco, Chicago, etc. It will only apply to new homeowners. For people who already own a home, the rules will not change. However, if you plan to buy a house for $550 and are willing to make a down payment of $50, you can still write off all interest paid on your taxes.

4. It will no longer be possible to write off taxes paid in the form of interest on student loans.

5. A new “family loan” is being created, under which the children's tax credit is increasing from $ 1000 to $ 1600.

6. It is intended to reduce the taxation of returning to the country capital for further investment. Finally,

It is noted that retirement savings plans, such as 401 (k), will not change.

Recall that the first draft of tax reform was submitted by the White House back in April 2017. At first Trump insisted on reducing corporate tax to 15%, but later made concessions to the Republicans and agreed to 20%.

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