We introduced you recently to some victims of the Trump tax plan—people who expect to face higher taxes under the law President Trump is expected to sign in early January. So now, let us introduce you to some taxpayers who expect to benefit from the plan.
In general, Yahoo Finance found plenty of Americans who expect a modest tax savings of $1,000 to $2,000. Most are grateful for the extra cash and plan to put it to good use. Some worry about the $1.5 trillion in additional debt Uncle Sam is taking on to pay for the tax cuts, while others don’t expect the tax cuts to last. But who disdains a bit of extra cash? Certainly not these folks:
The securities-lending rep in Omaha. Soren Grandall, 23, expects to save about $2,000 under the Republican tax plan. That’s mainly because he’ll fall from the 25% bracket in the current law to the 22% bracket under the new law. He may also benefit from the doubling of the standard deduction, from $12,000 to $24,000 for a married couple, and since he has no kids, the repeal of personal exemptions won’t harm him.
Grandall voted reluctantly for Trump in 2016, and hasn’t been thrilled with Trump’s performance as president. He sees the passage of the tax bill as a win, but still has reservations. “In the short term, they did pass something meaningful,” he says. “But I also see that at the end of the tax bill, it’s probably going to swing the other way and get a whole lot worse.”
Soren Grandall of Omaha, Nebraska. Estimated tax savings: $2,000. Photo courtesy of Soren Grandall
The Iowa CPA. Steve Hellman of Waterloo, Iowa, figures he’ll save about $1,500 on account of his tax bracket dropping by a few percentage points. The 53-year-old accountant will put the money back into his business. Of his many clients in several Midwestern states, many will benefit from the new, higher threshold for the alternative minimum tax, which means they’ll no longer have to pay under AMT rules and their overall tax bill will go down. But other clients will get stung by the new cap on state and local deductions of just $10,000. “Here in Iowa, our upper-income people are going to be harmed by it,” he says. “We’ve got a top income tax rate of almost 9%, and I’ve got a lot of clients who are going to be limited to that $10,000.”
The aircraft maintenance technician in Georgia. Like many others, Scott Bell of Atlanta, 53, expects to drop from the 25% bracket to the new 22% bracket. That might save him $1,000 or so. But he’s even more hopeful that lower tax rates for businesses will improve pay and work conditions for their employees. “My company has already said that with lower taxes, they’re going to invest in people more,” Bell says. “If the U.S. economy is stimulated generally, we’re all going to do better.” That’s literally true in Bell’s case, because he participates in a profit-sharing plan that will boost payouts to workers if corporate earnings rise.
The public policy adviser in Baltimore. The upcoming year will be a big one for Sam Kahl, 22, of Baltimore, since he plans to get married and buy a house. The doubling of the standard deduction will save him money while he’s single, and maybe save him more once he’s married. “I would pay about $2,000 to $2,500 less,” says Kahl, who’s a public policy analyst for the state government. “That’s important to me as somebody who’s soon to be a homebuyer, and getting married. It allows me to purchase a little bit more of a home, and have a little bit more to save and invest.”
Sam Kahl of Baltimore. Estimated tax savings: $2,000 to $2,500. Photo courtesy of Sam Kahl
The retired electronics salesman in southern California. Tim Roberts of Valencia, who’s 64, minimizes withdrawals from his retirement funds in order to keep his tax bill as low as possible. Now, he thinks the new tax brackets will let him take a bit more out without paying more in tax. “I think it’s going to be absolutely awesome,” he says of the new tax law. “For me, it’s quality of life. I’ll use the money for seeing the country, spending time with family and friends.” He’s already planning a long road trip next year to Yellowstone, Grand Teton and other parts of the northern Rockies. If he can finagle additional funds in a tax-friendly way, he might plan another trip up the Pacific coast to Vancouver, where he’ll do some salmon fishing.
The Delaware analyst. Todd Guidry of Wilmington expects to save as much as $1,500, mainly because his family will drop from the current 25% bracket to the new 22% bracket. The 30-year-old analyst at a financial firm will have to reevaluate his itemized deductions, since his family tithes (which counts as a charitable deduction), while also itemizing mortgage interest and state and local taxes. But those state and local taxes are right around the new $10,000 cap, so they won’t lose much of a deduction, if any. And the new money will be welcome. “We’ve got a new roof coming in the next 5 years, and 2 kids who need a college fund,” Guidry says. “Every little windfall helps.”
The retired schoolteacher in Michigan. Tom Torok, 68 of Vicksburg, Mich., expects to save between $1,000 and $1,500 in taxes, mainly from the doubling of the standard deduction. He’s digging out of a small hole formed when he incurred penalty fees for an early withdrawal from a retirement account a few years ago, and the extra cash will help. “It’s a meaningful amount of money,” he says of the savings. “Instead of having to borrow money in April to pay my taxes, I won’t have to do that.”
Tom Torok of Vicksburg, Mich. Estimated tax savings: $1,000 to $1,500. Photo courtesy of Tom Torok
He also thinks the tax cuts will help boost the local economy, which has been depressed from the longstanding loss of manufacturing jobs. “A lot of people around here are going to go back to work for the first time in 8 years,” he says. “Companies are hiring now. When people go back to work, they pay taxes. I don’t expect the national debt to grow if people are going to pay more taxes.”
