It's been a long time since we have had good, strong economic news to start a year, but 2018 is looking pretty promising!
Today, to start the year, the average Floridian is making about $1,500 more compared to this time last year.
Because the new tax law kicks in today, here's what it means to you...
Nearly all Floridians who pay federal income tax will save significant money (those who wouldn't would be the absolute wealthiest with very specific circumstances). Here are a few keys to keep in mind.
The new tax law is now in effect (no impact on your 2017 taxes)
It's likely to take additional time for the feds & employers to reflect withholding changes in your paycheck (this means that you'll likely not see the net impact immediately in your paycheck though it'd be accounted for when you file your taxes)
Most estimates believe employers and the feds will have made the changes by February
The individual mandate for healthcare is eliminated, so you don't have to have health insurance or face the additional tax
So, what does it mean to you?
There are still seven tax brackets: 10%, 12%, 22%, 24%, 32%, 35%, and 37% (all but the 35% bracket being a reduction in tax rate)
There is a near doubling of the standard deduction (along with other changes in the plan, the net effect would be much simpler tax filing for most who currently itemize. 32 percent of Americans currently itemize. That would be around a 6 percent drop)
So, there's a far better chance that if you had to itemize before - you'll no longer have to worry about any of that come next year. If you're in doubt touch base with your accountant or tax prep service.
Now let's talk money.
With the new median income at $47,631 and the new tax law in place and using standard deductions, you would have paid $6,060 in federal income taxes last year.
With the new law you'll pay... $4,086.
That's a savings for the average Floridian of $1,974. That's 4.1 percent more money in your pocket! Once you put it together with the year over year increases in earnings - you're likely to have 7 percent+ more to show for your work today compared to a year ago!
That's the best start to a new year since the Reagan tax cuts kicked in just over 30 years ago.
So happy new year! There's plenty of reason to celebrate - especially once you see how much more you'll get to keep in your paycheck.