By Andy Frye
I think we would all agree that you can tell a lot about a person by the way they spend their money. President Trump released his proposed 2018 Budget for the U.S. Government, titled “A New Foundation for American Greatness.”
This budget document, 62 pages long, is much more detailed than the one page tax reform plan that we blogged about a few weeks back.
I was curious what the proposed budget said about taxes and tax preparers, so I took a quick read through it, and here are my findings of a few items that you may want to keep an eye on…
Simplication of Individual Tax Code
Expanded standard deduction, no more AMT, and no more estate tax are all significant “de-complexifiers” (that a word?). Overall, a major push towards simplifying the tax code for individuals.
100% Pro-Business Stance
The budget document reads as incredibly friendly to business. Lower taxes and less regulation, all around, A to Z. No matter how all this plays out in real life, there can be no doubt that President Trump prioritizes the needs of business owners to an extremely high degree, and tax preparers serving business owners would seem to benefit here.
“Immigrants with High School Diplomas Only, Please”
The document contains quite a bit of rather aggressive language regarding immigrants without a high school diploma, emphasizing how “expensive” the current immigration policy has been for taxpayers in terms of paying out welfare benefits. Without a doubt, tax preparers who serve lower income communities with heavy immigrant populations should keep a close eye on these developments. Social Security Numbers must be “Valid for Work” or else no Child Tax Credit and no Earned Income Credit.
New Tax Preparer Regulation
The budget also resurfaces the idea of nationwide regulation of professional tax preparers, by the IRS. No real details on the regulations themselves. This document would “authorize” the IRS regulate tax preparers more thoroughly, and IRS would then be in charge of actually making those rules.
Student Loan Relief and/or Forgiveness
The idea of “income-based repayment” of student loan debt takes another step forward in this proposal. Repayment of undergrad loans would be limited to 12.5% of “discretionary income.” Is there an opportunity for tax preparers to help fill out the forms that determine how “discretionary income” is calculated? Seems like that could be a nice service to offer your clients with student loan debt. Also worth noting, after 15 years, any unpaid undergraduate debt would be erased.
These are a few items that jumped out at me, that may be of interest to you as a tax preparer.
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