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Charlottesville Accountant Breaks Down Elements of New Tax Plan

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Phillip Shiflett Phillip Shiflett
CHARLOTTESVILLE, Va. (WVIR) -

A new federal tax plan is headed for President Trump's desk, and he's expected to sign it before the end of the year.

Charlottesville-area accountants are breaking it down to help taxpayers understand what the new rules mean for your wallet.

Wednesday, NBC29 spoke with Phil Shiflett, who’s one of the partners at Hantzmon Wiebel accounting firm. He says the tax plan comes with positives and negatives.

For most people, the individual tax rate is coming down. Each bracket is generally two to three points lower, but that doesn't mean people will necessarily pay less.

That's because personal exemptions are eliminated. That means parents will not get a tax exemption for children previously claimed as dependents.

However, the child credit for parents with children under the age of 18 who are living at home has doubled.

Shiflett says the other downside is the plan limits state income, local property and sales taxes.

"Your deductions are now limited so if you happen to pay $10,000 dollars in real estate taxes and $10,000 in state income taxes, previously you could deduct $20,000. Now your deduction is limited to $10,000,” Shiflett said.

The tax plan also repeals the individual mandate that was put in place as part of the Affordable Care Act. That lifts the requirement for people to have health insurance starting in 2019.

The good news is really for big companies and corporations. Their tax rate is dropping from 34 percent to 21 percent. Shiflett says that could be the incentive businesses need to create more jobs.

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