By coinnews 
00:00 Speaker A
Republican lawmakers are looking to push forward President Trump’s tax agenda. The current proposal would make the 2017 Tax Cuts and Jobs Act permanent. Increase the child tax credit, raise the cap for state and local tax deductions and temporarily create a tax deduction for tips and overtime along with other provisions. Joining me now, we’ve got Carla Dennis, KDA CEO and founder. Great to have you here with us. So let’s start with one of the key issues in negotiations. The limit on the deduction for state and local taxes known as SALT. What do people need to know about the SALT and the proposed changes?
00:45 Carla Dennis
Well, right now they’re proposing a to take the cap off of salt. Some of the lawmakers are saying taking it to $60,000. But this has been such a contentious issue in a lot of the high earning states like New York, California, New Jersey, because they feel like they are being penalized, not only paying higher state income taxes, but then they can’t even deduct those because the cap has been at $10,000. So this would be a welcome change.
01:25 Speaker A
What about changes to the child tax credit? How do you believe that that’s going to work?
01:34 Carla Dennis
The changes to the child tax credit is going to be beneficial because it’s going to allow those parents to get a credit against their actual tax bill. That’s always a win when you can have a tax credit versus a tax deduction. And I think that that is going to be a welcome change as well.
02:04 Speaker A
Okay. So can we explain the bill’s proposals for Social Security and what it means for filers as well?
02:16 Carla Dennis
For Social Security, they’re talking about no tax on Social Security income. So these are retirees that were living off of their Social Security and were not even expecting to pay any tax on that Social Security. So not taxing it now, regardless if you making other income is really going to help them and they will have more stability in their retirement years going forward.
02:54 Speaker A
And so how does that help stretch some of the retirement dollars potentially?
03:04 Carla Dennis
Yes, because when you’re not having to pay that tax, that means there’s going to be more money in your pocket. Retirees will not have to pay tax on the money that they’re receiving, so they can actually live off of all of their earnings that they make and hopefully stretch their income longer to take care of basic needs, housing, living, food, and things of that nature.
03:37 Speaker A
So the legislation also includes one of the president’s promises to eliminate taxes on tips, but there’s a lot of questions around exactly how it will work for some filers here. What do we know?
03:54 Carla Dennis
Yeah, for taxes on tips, they’re talking about not having any income taxes on tips. They’re not clear as to how this is going to play out from an implementation perspective with actual employers. How are they going to segregate that income out? But definitely not having tax on tips is going to help the working class Americans, people that are working in these various industries that typically aren’t paid that much to begin with. So this is certainly going to be a welcome change for those working Americans.
04:32 Speaker A
So is this from what we understand an elimination on the front end where it’s just not coming out of your paycheck or is there something that you have to file for later on in the year and after the kind of full year and season for tax filing commences?
04:54 Carla Dennis
It’s going to be an elimination at the paycheck level because there would really be a nightmare trying to do it on the back end because that would require employees to really understand what dollars were overtime, what dollars were not overtime and it’s not reported like that on the individual’s W2. So that would take a lot of overhauling. Right now it is slated to take place at the employer’s end when they’re actually administering the paychecks.
05:27 Speaker A
Another inclusion, lastly is a plan to create a new tax advantaged money account for growth and management for children born between 2025 and 2028. How will that impact taxes?
05:47 Carla Dennis
Yes. So you’re talking about the My American Dream savings. This is very new and basically what it is, is to encourage Americans to start to save for things like buying a primary residence, to save for their education and to do it tax free. I think in this particular instance, they need to be clear on what the particulars are going to be because I always say the individuals, we want to make sure we understand the compliance so that this is going to work for everybody and not just the wealthy to top 1%.
06:30 Speaker A
Carla, thanks so much for taking the time here with us today.
06:35 Carla Dennis
Thank you.