The United States Senate and House are currently busy as they finalize the final tax bill they will send to President Donald Trump. They are hoping that these two bills will be signed by Christmas time. How will these bills impact the state of Georgia, both individuals and businesses? Will this also impact the number of tax applications as they have already advised to start Georgia application for tax filing?
In terms of personal tax brackets and deductions, the House bill proposes to only have four brackets instead of seven in the current tax systems. These four brackets are 12, 25, 35 and 39.6 per cent. It will retain the top rate while the cuts will be permanent figures. The House bill increased the deductions to for individuals to $12,200 and heads of households will have a deduction of $18,300 while individual deductions increased to $24,400.
The senate bill will still follow the seven brackets but the top rate will be decreased to 38.5 per cent. There is a catch though, the tax rates will return to normal in 2025 based on the current law. The bill also increased deductions – heads of households will have $18,000, joint filers can deduct $24,000 and single filers will have $12,000 worth of deductions.
For healthcare, the House bill chose to retain the mandate by Obamacare for personal insurance but there is no longer a provision that mandates tax deductions when it comes to medical costs. Senate bill, on the other hand, is proposing to revoke the mandate under Obamacare. The Congressional Budget Office said that if it were to happen then 13 million individuals in the United States will lose their health insurance in 2027. The senate allows deductions for medical costs that are more than 7.5 per cent if the tax payer’s adjusted gross income. In the next two years. After which, deductions will only be allowed if medical cost is over 10 per cent of the adjusted gross income.
Tax ID in the state have already start Georgia application, those who wish to avail should process theirs as soon as possible.