Problem lurking for next year in new tax law
Recently, a CPA made me aware of a "storm that is coming" to taxpayers in the area. He shared with me (with the client's name redacted) the 2017 vs. 2018 tax projections he'd recently done for a local firefighter. After working through the numbers for him and other clients, the CPA was dismayed to find a lurking problem that will surprise and upset many average taxpayers in our area next year. It seems that the GOP Tax Policy Committee for House Ways and Means, led by our Congressman Peter Roskam, has buried a "time bomb" in their new tax bill.
Specifically, while the firefighter was pleased that his paycheck had gone up, he got pretty upset when the CPA showed him that next April (2019) he would actually owe $1,591 instead of getting the $3702 refund he will receive this year on basically the same projected income.
By messing with the withholding tax tables, Roskam, Trump, and the GOP have structured their "tax cut" to give an average person the illusion of having more money in their pocket before the 2018 election. It won't be until tax time in 2019 (conveniently after the election is over) that many taxpayers will realize that, because of the cap on SALT deductions (as well as the elimination of many others), they may actually have to write a check to the IRS instead of receiving the refund they've gotten in the past.
So, be forewarned. That "tax cut" Roskam engineered looks like it's really just a twisted way to shovel more money to donors while deceiving his constituents into a false sense of security before it's time to "pay the piper."
Do we really need a representative that is trying to trick us? The answer is a firm "no".