Let’s talk taxes.
We’re nearing year-end, which means a number of us are looking at our potential tax liability and considering charitable contributions in an effort to reduce the amount we have to send Uncle Sam on April 15.
That not a good thing; it’s a great thing. Helping others should be its own reward, but there’s nothing wrong with being able to help ourselves while we help others.
And while we encourage everyone to make a holiday contribution to their nonprofit of choice — your local school, Our Neighbor’s Pantry, Mt. Graham Safe House, SEACUS, SEACAB, the Boys & Girls Club of the Gila Valley, St. Vincent de Paul, GCRC, etc. — you actually have until April 14 to make those donations to qualify for the state tax-credit.
Here’s the thing, though: take advantage of those tax credits now, because many appear to be going away.
The Republican tax plan that is being worked on by the Senate and House removes a significant number of deductions that all of us in the Gila Valley utilize, including the deductions for state and local income taxes and county property taxes.
The deduction for expenses due to natural disaster is also targeted for elimination. So if another fire breaks out on the mountain and people lose items — such as personal items in cabins or vehicles — they have to bear the full cost of replacing those things.
Freeport plans to hire as many as 600 new workers in Morenci and Safford, and people from out of the area might fill a number of those positions. We welcome them to the Gila Valley, but they won’t be able to deduct their moving expenses.
College will become a whole lot more expense under this plan, because student loan interest, as well as tuition and fees, would no longer qualify as deductible expenses.
Speaking of education, as we know, thanks to declining school budgets (primarily due to a state Legislature that routinely strips districts of owed funding), many teachers pay for classroom supplies out of their own pockets. Under the House version of the tax bill, those purchases would no longer be deductible.
On the plus side, the standard deduction would increase to $12,000 for individuals and $24,000 for couples filing jointly. The downside is the personal exemption of $4,050 for each spouse and dependent goes away, wiping out any savings from an increase in the standard deduction.
And, whatever you do, don’t get sick. Not only does the bill gut the Affordable Care Act, it also eliminates medical expense deductions.
It should be noted, however, that corporations and billionaires make out great. Moving expenses no longer deductible? Maybe for workers but not for corporations that cut American jobs and moves the plant overseas.
That’s in addition to reducing the top corporate tax rate to just 20 percent.
And while the middle class loses deductions for college, the rich get an expansion of the 529 plan, a tax-free school savings plan that is currently for college but would now include K-12 private and parochial schools. That’s right . . . we’re talking about federal expansion of the state’s school voucher plan that harms rural areas, and that the poor and middle class can’t afford to use.
Under the GOP’s tax plan, the voucher expansion even covers children in utero. We’re very curious about that, because, to date, we’ve not yet seen a fetus at a prep school — the bad guys in every ‘90s coming of age movie and the Fresh Prince of Bel Air, sure, but no fetuses.
While the changes to our tax system seem a foregone conclusion, we bring this all up to remind everyone that there is still an opportunity to help worthwhile programs here in the Gila Valley — programs that help our friends, neighbors and family members — and still see some benefit ourselves.
Take advantage while you still can.