SOUTHEASTERN, NC (WECT) - The House of Representatives officially approved a major overhaul of the U.S. tax code on Wednesday afternoon, the first such move in more than 30 years. Now, the bill is passed to President Trump, who is expected to sign it into law.
With more than 500 pages, the tax bill introduces many changes for families and businesses.
Individuals will feel several changes to their taxes starting when they file in April 2019, including:
- People will pay a lower percentage of income to federal taxes.
- The standard deduction is almost doubled. That’s the portion of money you earn that isn’t taxed.
- Personal exemptions are eliminated. These are reasons people have fewer taxes taken out of their paycheck.
- The child tax credit is doubled from $1,000 to $2,000.
Businesses and corporations will also experience money changes under the updated tax law:
- Corporate earnings are taxed at 21 percent instead of 35 percent, so they will pay fewer taxes to the government.
- Pass-through businesses will experience fewer taxes.
- U.S. multinationals will be taxed differently.
About 95 percent of taxpayers in North Carolina will see a reduction in how much tax they pay, according to David Tepper, a CPA who ran an analysis for WECT News.
"At the end of the day, there are a lot of complexities," Tepper said. "But for the most part, I believe most taxpayers should see a decrease in their taxes, which will mean an increase in their taxable income."
Large corporations will experience a greater tax benefit from this bill, according to Tepper.
"Most companies are mid to small businesses in New Hanover County," Tepper said. "They are definitely also going to see a tax benefit from the law change. It's just not going to be quite as large as the rate reduction that the large companies got."
People may see the difference in their paychecks effective January 2018 depending on withholdings and other factors.
However, the majority of the bill's impact won't be noticed until April 2019 when taxes are filed for 2018.