WASHINGTON - With Donald Trump becoming the president-elect, many voters may be wondering about how the shift of power will have on their financial bottom line. So what can we expect going forward? FOX 5 talked with Kiplinger’s Personal Finance about five ways Trump could impact your wallet.
Doug Harbrecht, director of new media for Kiplinger.com said Trump’s plan brings a big plus for LLCs and small businesses.
“He wants to cut the federal corporate tax break from 35 percent to 15 percent,” Harbrecht said.
When it comes to income tax, the wealthier you are, the more you benefit. One percenters, including Hillary Clinton, are able to save millions.
People earning between $50,000 and $80,000 will see about a $1,000 tax saving a year. According to Harbrecht, those earning below $50,000 will “get a tax cut too, but not as significant as $1,000.”
#2: Health care
There will likely be significant changes, if not an outright repeal, of the Affordable Care Act. Harbrecht said that would mean almost 10 million Americans who currently have health care under Obamacare will lose it.
Trump has said he wants to replace President Barack Obama’s health care with a system where private health care providers can compete across state lines.
“They can sell insurance across state lines and create more competition to try to drive down the cost of plans for people who do not have company-provided health care,” said Harbrecht.
#3: Student debt
Under Trump’s plan, the interest rates would be variable depending on your chosen career path.
“A sociology major might not have as high as an interest rate on their student loan as someone going to law school,” Harbrecht said.
#4: Social Security and Medicare
Most of the debate has been over making cuts in benefits or increasing the retirement age.
“Trump has said he has no interest in doing either,” said Harbrecht.
#5: Dependent care
Trump plans to set up a new tax deduction based on the average cost of child care in your state.
“So you could take a dependent care write-off for up to four children or for an elderly dependent that you are caring for,” according to Harbrecht.
Trump also wants to set up a fund where you could put money toward dependent care that would be tax exempt.
Harbrecht said there is much that remains to be seen when it comes to what we can expect after January 20 because many of the president-elect’s proposals are rather vague.