How The New GOP Tax Bill Will Affect You

Let’s talk about how the new GOP tax bill will affect you.
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Tax Law changes for 2018 will discuss differences in the tax filing for 2018, filed in 2019, compared to the prior year tax filing for 2017 due in 2018.

For specific tax advice consult a tax professional.

There are many changes to the IRS tax code for 2018 in comparison to the prior year. We will look at an overview of the big IRS tax law changes as an introduction to the topic of taxation.
We will start with a discuss of why we should learn tax and how we can approach the learning of tax law to get the best results.
6:36 Changes to form 1040

We will then discus the changes to form 1040. The form 1040 will look much different in 2018 then 2017, Form 1040 being much shorter in 2018. Forms 1040EZ and 1040A have been eliminated. There are new supporting schedules to the form 1040 however.

10:09 Elimination of Personal & Tax Exemption

We will then discuss the elimination of the personal and dependent exemptions for 2018. Exemptions acted similar to deduction in 2017 and we got an exemption for ourselves, our spouse, and dependents. The elimination of exemptions in 2018 will simplify the tax code and may be offset by the increase in the standard deduction and other changes for many taxpayers.

12:36 Increase in Standard Deduction

There has been a substantial increase in the standard deduction in 2018 tax code as compared to the prior year. Because taxpayers must decide to either take itemize deduction or standard deduction, whichever is larger, the increase in the standard deduction will result in less people itemizing. The elimination of the standard deduction is an attempt to simplify the tax code and will have a positive impact to many lower to middle income people.

15:39 Decrease In Tax Brackets

Tax rates have basically decrease is the simple method of describing the changes to the tax tables. Because we have a progressive tax system our taxes are taxed at multiple rates. Many were hoping we would have less tax brackets to simplify the tax code. We still have a complex tax calculation but we did see a decrease in many rates and positive changes that would lower taxes to most any tax payer if the taxable income was the same. In other words there are two factors for tax liability calculation, taxable income and tax brackets. Given the same taxable income the tax brackets would be less in 2018 then in 2017.

18:34 Child Tax Credit Increase

Child tax credit has increase substantially. The increase in the child tax credit will partially compensate or offset the loss of the exemptions for many tax payers. The child tax credit is up to 2,000 for 2018, up from 1,000 in 2017 and much of it is refundable in the 2018 tax changes.

20:40 Limit on state & local tax deductions

State and local taxes have been capped at 10,000, a very controversial change. State and local taxes are itemized deduction on schedule A and include state income tax or sales tax and property tax. Itemized deduction have already been marginalized with the increase in the standard deduction. The state and local taxes are one of the big factors, along with mortgage interest, that push most people into a point of itemizing instead of taking the standard deduction. This change in the tax law could result in many less people itemizing and could increase taxes for sum, especially those in state that have a high cost of living.

24:58 20% Pass-Through Tax Deduction

The 20% pass-through tax deduction tax law change could have a huge impact on individuals that have small business. The law is complicated however, so may not contribute to the simplification of the law, but could help small business save on their tax bill. Business entity types this law covers includes sole proprietors who report on schedule C, LLCs, S corps, and partnerships.

27:30 New Tax Credit For Other Dependents

There is tax credit up to 500 for non qualifying child dependents. After losing the exemption this credit could help compensate or offset the loss, taxpayers still getting tax savings for supporting a dependent.

29:00 Limitation On Home Mortgage Interest Deduction

The tax law changes have limited the amount of home loan for which the related interest can be deducted to 750,000. Most taxpayers will not have a loan over 750,000 but this change may hurt those who live in high cost of living states. We also loss the ability to write off interest for loans where the the house is used a collateral but the money was not spent on the home.

32:36 Elimination of 2% Misc. Deduction & Casualty & Theft Losses

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Industries that don't work in a so-called, "free" market (proven by the complete corruption of US corporations):
1. Medical Industry – The United States has the highest cost for health care out of any other first-world country SPECIFICALLY because the "free" market was allowed to fester and thrive. It is known that nearly all medications that are sold in the US are inflated for cost anywhere from 250-3000% the manufacturing and distribution cost of the exact same medicine anywhere else. Remember the Pharma Bro? He is not the first or last person to do what he did–he's just the idiot that got caught. Hospital visits are also grossly inflated specifically because of privatized health insurance; insurance companies encouraged hospitals to make services rendered as expensive as possible JUST so that the insurance company could create inflated discount rates.
2. Entertainment Industry – Since the Walt Disney Company came into existence, they have been systemically increasing the length of time for copyright. It's now been extended to 70 years after the author passes. That means someone could make something at the age of 18, and their work will not be released to the creative commons until (potentially) 148 years AFTER they made the work. This result of the "free market" at work actually hinders creativity, productivity, and the market itself significantly. We will be working with recycled reboots and characters for at least another 50 years before anything new gets in the creative commons.
3. Housing Industry – While rent control is proven not to work, complete free reign and systemic abuse of the industry is directly what resulted in the 2008 housing crisis and economic recession. While you can sit in your chair and argue it's because the People are to blame, the truth is that the system is broken if people can make the decisions that they did in accumulating debt over financial wealth. It's no secret at this point: our economy is driven by stock prices, and stock prices are being artificially inflated for the instant gratification rather than fixing any problems. The result: we have corporate real estate companies building apartment buildings that they never had any hope or goal of ever actually filling. These physical buildings are being built and expending space while leaving the homeless on the street for no other reason than to increase the stock price by 1-7%.
4. Automobile Industry – Automobiles have ruined are urban infrastructures, isolating or communities, and take up more than 4 times the same per person. Everything in the auto industry is built to perpetuate spending, not provide a product that lasts and substantiates utility.
5. Mattress Industry
6. Agricultural Industry – We overproduce produce and meat by more than 100% for no other reason than to overstock supermarkets. That means we waste the majority of all food produced! This has a hugely negative impact on the environment.
7. Insurance Industry

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Tim Hernandez

The Big Banks and Wall Street (Companies) are always looking out for the "good of society". It's common sense…"Use your brain"… LOL C'mon Dave. Wasn't it the Banks that got bailed out by the Government after their greed practically ruined our economy? The joys of deregulation!

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blainaful

Looks like Dave was way over his skies about the GOP tax plan. 1.9 trillion added to the national debt. Maybe he should do an update and admit what most economists and historians have pointed out in the past, trickle down does not work.

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Dakota Puckett

Liberal tears

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bob

The more I listen to Ramsey the more I have contempt for this self serving hypocritical right winger

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Arturo Sandoval

Evangelicals just want money and want to destroy government,greedy

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Asia Cannon

In terms of income tax, most people would benefit from the way the new tax brackets are set up. Most people would end up getting taxed less than they did with the old system. Especially the very poor, lower middle class, and the very rich.

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Dillon Green

They didnt buy $10k hammers that was a cover up for fraud

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Sarah Bella

So basically, you don’t know anything about how the new tax law will affect us.

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danny hernandez

Oh no here comes all the YouTube EXPERTS have to say

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drew34000

But the government isn't spending less, the government is spending more than ever now just borrowing to pay for the tax cut.

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Issadog Boss

Learned Dave Ramsey cut is better than mine and who helps those in need of yea all those fake Christians building mega churchs. Guess I am a socialist.

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Iggy O

Wow. Dave sue meetKevin for giving an honest review of his real estate program. Just fix the issue Dave.

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Kurt Dardis

How can we get our government back into a surplus?

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John Lasley

Indeed

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john smith

lol in another video he was saying that poor should pay more, than they already do,classic right winger,wants rich to pay less and the poor more

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Sherri Walker

Hey is there a Dave Ramsey boardgame? If not , why?

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Jorge Garnica

Sure, you mention how rich people go and spend money. You don't mention how you double or triple your money on investments

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Angry Arkie

Harm.. without bringing politics into it and keeping the answer short, the new tax bill is based on chain CPI, so the middle class will actually be paying more in five years than they would have otherwise.

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Gerald's Videos

First!
Thanks for this. Used to do my own, and wifey's, via TurboTax. After a while, through life's normal complications, it became too arduous.
We now use an excellent financial and tax guru, here on Long Island, NY. Check out Robert Brown.

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