To the Editor:
The tax reform bill which Rep. Peter Roskam helped to write and both he and Rep. Randy Hultgren voted for, is now law, and there are a lot of changes. That includes reduced tax rates, higher standard deductions and higher child tax credits while taking away most of the deductions taxpayers used to reduce their tax bills.
House Speaker Paul Ryan and Sen. Marco Rubio have said it will be necessary to cut Medicare, Medicaid and Social Security to pay the $1.5 trillion the tax bill adds to the deficit.
The Institute on Taxation and Economic Policy estimates the bill temporarily will lower taxes for the middle-fifth of taxpayers by $800 a year on average, people in the top 1 percent of the income distribution will enjoy an average cut of $55,000 or
83 percent of the benefits.
According to Moody’s Analytics, many areas can expect the tax bill to cause home prices to stall. They predict the following loss in increases for counties in Illinois: Lake, minus 9.6 percent; Kendall, minus 8.7 percent; McHenry,minus 8.3 percent; and Will, minus 7.4 percent.
• Interest on home equity loans no longer are deductible in 2018. Existing home equity loans are not grandfathered.
• Moving expenses are no longer deductible.
• The new law allows deductions for casualty losses only for disasters where a federal disaster declaration was made. Were the floodings in our area declared a federal disaster? The law would apply only to disasters that occurred after the law went into affect Jan. 1, according to the New York Times.
Employees were allowed subsidized parking costs or transit passes. The corporate deduction for that cost is eliminated so businesses could be expected to cancel those programs. How many commuter taxpayers in Roskam’s and Hultgren’s districts will be affected by this?
Costs for tax preparation, investment fees and expenses, and trustee fees for an IRA no longer are deductible.
Starting January 2019, maintenance/alimony no longer will be deductible for the payer, therefore, it will not be taxable to the receiver. Assuming Illinois then moves to a net income model, the receiver likely will receive less.
Talk to your tax preparer to see how your personal situation will change.