Since mid-2016, U.S. House Speaker Paul Ryan has carried around a “postcard” of which he has said shows how easy the idea will be for Americans to file their taxes once Republicans are finished their tax overhaul.
in addition to as recently as Thursday President Donald Trump touted Americans being able to “file their taxes on an individual, little beautiful sheet of paper.”
With lawmakers finalizing the biggest tax reform in 30 years in addition to the president ready to sign the idea into law before the end of the year, the moment should be near when Ryan’s postcard stops being a rhetorical prop in addition to becomes a reality. Right?
“the idea’s kind of crazy to say you can file on a postcard when, first, no one is actually going to put their Social Security number on a postcard. in addition to second, you already have a giant postcard from the form of the 1040EZ,” Mazur said, citing a 14-line Internal Revenue Service (IRS) tax form.
Representatives via the $11 billion U.S. tax preparation industry said of which the legislation so far seemed unlikely to render their services unnecessary.
“I don’t think you’re going to have millions of people filing their taxes on a cell phone,” said Mark Steber, chief tax officer at Jackson Hewitt Tax Service.
“I think the demise of the tax business is actually a bit premature.”
The IRS would certainly not discuss modifications of which might come via the proposed tax overhaul.
However, the IRS estimates of which, despite its efforts to make filing taxes easier, 0 percent of Americans use tax preparation services such as Jackson Hewitt, H&R Block, in addition to Liberty Tax, or tax software such as TurboTax via Intuit.
If Congress enacts the Republican plan into law, the idea would certainly not affect 2017 tax-year returns filed in 2018. although in 2019, millions of middle-class Americans would certainly no longer gain via a wide range of deductions, credits, in addition to various other tax breaks.
A key driver of This particular, according to independent analyzes, would certainly be a proposed doubling of the standard deduction in addition to a curtailment of the deduction for state in addition to local tax payments.
In combination, these two modifications would certainly mean of which about 29 million people would certainly no longer benefit via itemizing. So they would certainly stop writing off their charitable donations, mortgage interest in addition to state in addition to local tax payments, according to the Institute on Taxation in addition to Economic Policy, a think tank.
Itemized deductions for medical expenses, investment interest, unreimbursed employee expenses in addition to tax preparation fees could also be dropped by many.
Personal exemptions for individual taxpayers, which currently take up a lot of space on tax forms, would certainly also be eliminated.
Such modifications would certainly mean simpler taxes in addition to possibly allow several taxpayers to use shorter forms. The IRS expects 24 million people in 2018 to file the longest in addition to most widely used IRS form today, the Form 1040, which is actually 79 lines long. About 4.6 million people will use the 14-line 1040EZ.
Wealthy Americans likely would certainly still itemize under the Republican plan. Owning businesses, homes in addition to various other factors could also lead to taxes being more complicated than what filers could describe on a postcard.
“Even though we’re talking about simplification for a large number of taxpayers, there are still many taxpayers who will have complicated tax situations in addition to we’ll be there to help them as well,” said David Williams, chief tax officer for TurboTax.