Modifications to the current system look to save money and simplify code
There is no denying it – the majority of college students are slackers when it comes to being in the know about taxes.
Yes, we understand money gets taken from paychecks, the sales tax at the end of every receipt and the form our parents fill out around April.
We’re not completely helpless.
Beyond that, our knowledge gets hazy.
Why should I care about cutting estate tax?
So what if there are three tax brackets instead of seven?
How is a corporate tax going to affect me anyhow?
Maybe you’re not inheriting a large sum of money anytime soon. (Sorry.)
However, as soon as you graduate from college and walk into a job, suddenly you’re in the system reporting to the Internal Revenue Service (IRS), whether you like it or not.
Those tax brackets? You’re going to fall into one, and it will determine how much or how little you have left over to spend on your vacation, car or shopping spree.
Some students may already be filing their own taxes, instead of filing as a dependent on their parents’ return.
Good for you — you’re a step ahead of the game.
Someday in the future you might have a family (maybe not that far into the future for some), and you’re going to need to put your child into daycare so you and your spouse can go to work in order to pay bills.
Paying bills in order to pay bills? Sounds pretty lame.
That’s not even the worst part.
If you were not aware already, daycare costs a pretty penny.
According to Business Insider though, under Donald Trump’s new tax reform plan, Americans would be able to deduct the cost of childcare, meaning the amount of income you spend on paying for daycare would no longer be taxable.
Basically, you tell the government that you’re spending at least $5,000 on childcare, so they will deduct that same amount from the income before they take your taxes.
If you’re thinking about getting married, or if you are married, a majority of the time, you file your taxes together in a joint tax return.
Originally, the marriage income threshold was more than double the single person’s income threshold.
Thus, married people paid more taxes together than if they were just single people filing separate returns.
According to USA Today, this “marriage penalty” would be eliminated under
So now your single friends can’t hold that over you when they give you a
hard time for getting married.
In the long run, Trump’s plan is saving most people money on their taxes.
Even the people who have a lot of money are saving a lot of money.
How can he do that?
If he cuts funding to other departments and sends the country into more debt, it can be done fairly easily.
Taxes bring income into the government, and now they just have to find alternative ways to get that income.
If this whole situation is still confusing for you, the only thing you need to know is that the GOP is trying to make the tax system simpler and easier for people to understand.
So if you can’t wrap your brain around it now, give it a few months.
You might be able to make sense of the new one.
Ledgerwood is an opinion writer.