Despite the name, the Tax Cuts and Jobs Act of 2017 didn’t really do much to reduce ordinary people’s tax bill. In fact, almost the same number of people saw taxes increase as decrease according to the most recent survey by Kiplinger.
Most people, 3 out of 5, reported that their taxes remained about the same as before the tax overhaul.
About 1 in 5 surveyed saw their taxes go down. The average decrease was $861. Seperately from the survey, we know that the highest 1% of income earners had higher amounts of tax reductions but we presume that these people are not reflected in the 850 people in the Kiplinger survey1.
Meanwhile 1 in 5 surveyed saw their taxes go up by an average of $2,000.
The average effective federal income tax rate among my clients is 20.5%. What I see most often is that the people who lost tax planning options are still struggling to find ways to reduce their taxes. There are usually reliable ways to reduce an individual’s income tax burden through investments, nonprofit entities and business activities. These options should be considered on an individual basis.
1These are the findings in a new national poll conducted by Kiplinger’s Personal Finance and Barclays US Consumer Bank of more than 850 taxpayers ages 25 and up surveyed. The survey results are published as sponsored content by Barclays.