The midterm elections brought about many changes across the United States. With the recent changes, there could be some impact on your finances.
Within the last two years, we witnessed one of the biggest changes to the tax code through the Tax Cuts and Jobs Act. This measure easily passed both the House and Senate before making its way to the President’s desk. While the tax reform act has made several changes to the Code, individuals can expect to see a major change in the following areas:
- Standard Deduction – Many individuals will no longer have a need to itemized with the increase in the standard deduction.
- Personal and Dependent Exemptions – Individuals will no longer be able to take a deduction for dependents and themselves. While this may impact households with a number of dependents, it will less likely impact those with fewer dependents.
- Reduction in the Overall Tax Brackets – All individuals can expect to see an overall reduction in their tax rates.
President Donald Trump has recently proposed more tax cuts. Just recently, he announced a plan to cut the middle household income by 10% prior to midterm elections. However, it is unlikely that any new tax bills will easily pass with the recent changes in Congress.
During President Trump time campaigning, he vowed to dismantled the Affordable Care Act (ACA), often known as Obamacare. To date, he hasn’t been successful in dismantling ACA. However, he has been successful in removing the individual mandate. This mandate was set forth by the ACA and penalizes individuals for not having healthcare coverage. With the new tax reform act, individuals are no longer required to pay a penalty for not having healthcare coverage, starting January 1, 2019.
We can expect with a new Democrat majority controlled House, the party will do their best to strengthen the ACA provisions to ensure it is around for some time.
In this year alone, we witnessed an increase in interest rates by the Federal Reserve three times. With the rise of interest rates, you can expect many of your credit cards and loans to be impacted. In addition, we can expect the Federal Reserve will increase its rate again before the end of the year. However, since it will now be difficult for President Trump to continue to cut taxes and increase spending, we can expect that the Federal Reserve will be less aggressive in its efforts.
Remember your choice, your future!