DALLAS (CBSDFW.COM) – Now that President-elect Donald Trump is just days away from taking the oath of office, many of the promises he made on the campaign trail could become closer to reality.READ MORE: 4 Interceptions Including A Pick 6 Help Deliver 27-17 Victory For Cowboys Over Saints
“If Mr. Trump gets what he wants done, it will be quite dramatic,” said Dallas tax lawyer Garrett Gregory speaking about the tax changes Trump touted during his campaign. “He is going for wholesale systematic changes. Everybody is going to see a change.”
Here’s the top five ways the Trump administration will likely affect your wallet.
1. Lower taxes – Trump’s tax plan would simplify the tax code – going from seven income brackets to three.
For a married couples making less than $75,000 (individual $37,500), you’ll be tax at 12 percent.
If you make as a married couple between $75,000 but less than $225,000 (individual $37,500 to $112,500), your new rate is down to 25 percent
The biggest cut would come for those making more than $225,000 (individual $112,500+). The tax rate would go down to 33 percent.
According to the Tax Policy Center, under Trump’s plan, while some will pay more, the average American household will save about $1,600 on their taxes.
2. More access to credit – Under a Trump administration, it could be easier to get a loan to start a business or buy a house. However, by rolling back on the rules on the financial industry some consumer advocates worry borrowing could get out of hand and the U.S. could face another mortgage crisis.
3. Child care expenses will be deductible – According to Trump’s team, a family earning $70,000 per year that spends $7,000 on child care would see their federal taxes decrease by $840.
More affluent families would likely save the most money under the plan. A family earning $240,000 that also spends $7,000 in child care would receive more than $2,000 in tax savings.
Unlike under the current tax-credit system for child care expenses, stay-at-home parents, would also be able to deduct the average cost of child care from their federal taxes.
4. Student loan debt will be capped – According to Trump’s plan, those with student loans will never pay more 12.5 percent of their income on student loans. Plus, under Trump’s proposal, if you make your regular student loans payments for 15 years, and you still haven’t paid them off, your loans will be forgiven. Many on Capitol Hill question whether Trump will be able to get his student loan plan pass Congress.
5. Taxes on businesses will go down – Tax experts say the big winners financially of a Trump administration will be businesses – everything from large corporations to small mom-and-pop businesses.
Under Trump’s plan, business income would be creased from the current 35 percent to 15 percent.
“This is the painter, the plumber, this is everybody that will pay 15 percent so that’s a huge impact for business owners,” explained Gregory.
The Tax Foundation estimates this change could grow the economy and increase wages by 5.2 percent. However, despite Trump’s claim of the contrary, even conservative-leaning think tanks say Trump’s tax plans will likely add to the national debt.
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