Summary of the Impact of the New Tax Bill (Standard Deduction, Exemptions, Child Tax Credit)

Index - https://steemit.com/tax/@alhofmeister/56nc4n-tax-blog-index

Introduction
Over the next couple of articles, I hope to explore the impact of the of the new tax bill with a focus on the changes to the standard deduction, exemptions & the child tax credit. The purpose is to demonstrate the tax implications of the new bill on families of varying size and income. To increase the visibility of the impact, I will be ignoring the effects of the earned income tax credit, the change in tax rates (using 2017 rates), and measuring the impact on taxpayers filing married filing jointly.

Calculation

Conclusion
As shown in the chart above, taxpayers with higher incomes that are either single or with qualifying children are receiving greater tax benefits from the new tax provisions. Upper and middle income taxpayers with dependents that aren't qualifying children will pay more under the new tax bill. Lower income taxpayers with no qualifying children will pay the same under the new bill as the old. To reiterate, I am not considering the effects of the earned income credit or the change in tax rates

What's interesting is the effect of the bill as a percentage of taxpayer adjusted gross income. The impact of the bill on taxpayers with qualifying children is progressive. For taxpayers with no children, however, the middle income category seems to benefit the most from the bill while the lower income taxpayers benefit the least. For taxpayers with dependents that aren't qualifying children, middle income taxpayers receive the greatest detriment from the tax bill while low income taxpayers will not see an increase in their taxes. Higher income taxpayers, as shown, will be in the middle.

References
Low Income Taxpayers Supporting Calculation - https://steemit.com/tax/@alhofmeister/impact-of-the-new-tax-bill-on-lower-income-taxpayers-standard-deduction-exemptions-child-tax-credit

Middle Income Taxpayers Supporting Calculation - https://steemit.com/tax/@alhofmeister/impact-of-the-new-tax-bill-on-middle-income-taxpayers-standard-deduction-exemptions-child-tax-credit

High Income Taxpayers Supporting Calculation - https://steemit.com/tax/@alhofmeister/impact-of-the-new-tax-bill-on-high-income-taxpayers-standard-deduction-exemptions-child-tax-credit

Disclaimer
Any accounting, business or tax advice contained in this communication, including attachments and enclosures, is not intended as a thorough, in-depth analysis of specific issues, nor a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties.