- Republicans, including White House adviser Ivanka Trump, are promising that the vast majority of Americans will be able to file their taxes on a postcard-size form under the newly passed GOP tax bill.
- But tax experts and preparation professionals say otherwise.
Republicans are promising that the vast majority of Americans will be able to file their taxes on a postcard-size form under the newly passed GOP tax bill, a claim that is disputed by tax experts.
“I’m really looking forward to doing a lot of travelling in April when people realise the effect that this has. … The vast majority will be [doing their taxes] on a single postcard,” White House adviser Ivanka Trump, the president’s daughter, said on Fox News on Thursday.
“We’re making it so simple that almost nine out of 10 taxpayers can do their taxes on a form like a postcard,” House Speaker Paul Ryan said on Wednesday shortly after GOP lawmakers passed the bill. President Donald Trump said earlier this month that middle-class taxpayers “will be able to file their taxes on a single, little, beautiful sheet of paper.”
Proponents of the bill argue that the doubling of the standard deduction and new limits on the deduction for state and local tax payments will mean that millions of taxpayers will no longer benefit from itemizing deductions, thus simplifying their tax filing. Indeed, the nonpartisan Tax Policy Center says that about 30% of those who currently itemize deductions will no longer do so under the new tax system, instead opting for the standard deduction.
But experts and tax professionals say that while taxes may be simplified in some respects, they will be made more complicated in others. For example, a business owner’s taxes may be streamlined, but the personal taxes, including for pass-through income, will likely be more complex, according to the Tax Policy Center.
While the GOP initially promised to reduce the number of tax brackets from seven to three, the final bill has eight. And it preserves the vast majority of targeted tax breaks. As Jim Tankersley, a tax and economics reporter at the New York Times, wrote, the GOP tax bill “creates as many new preferences for special interests as it gets rid of,” adding that the bill “layers new tax complexities upon businesses large and small.”
“The whole purpose of tax reform is to eliminate tax breaks to simplify the tax code and reduce rates,” Marc Goldwein, senior vice president for the nonpartisan Committee for a Responsible Federal Budget, told The Times. “But from what I can see, they only repeal one significant tax break, and very few if any tiny ones.”
Experts and tax professionals say that taxpayers will still have to keep careful records and do calculations to figure out whether they qualify for deductions.
“You can file with the EZ form, but it’s probably not in your best interest,” Mark Steber, chief tax officer at tax preparation company Jackson Hewitt Tax Service, told NBC News. “I do not envision a scenario where our society is so simple and so standardised that … 100 million plus Americans will pay a fair amount of tax and be equitably treated with nine lines.”
On the campaign trail, Trump predicted that his tax reform plan would hurt the $US11 billion tax preparation industry. But tax professionals say otherwise.
“I’m already getting new clients,” Karla Dennis, the founder of tax preparation firm in California, told NBC this week. “It’s really confusing – it’s not simplified in any stretch of the imagination.”
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