Typically during tax season many Americans have trepidations and consternation about the filing process, whether they complete their own taxes or use an outside tax preparation service for $75 to $300. They know and understand the complexities, so thankfully the new tax reform law signed by President Donald Trump on December 22 will make life easier for millions of citizens.
It’s dubbed the “postcard” but of course it is mailed to the IRS in a sealed envelope to protect one’s confidential identity. There hasn’t been much media attention on the advantages of this simplistic approach, and that may be because Americans won’t be utilizing this form until the first quarter of 2019. But it will revolutionize how we pay taxes.
Paul Ryan, our U.S. Congressman and Speaker of the House recently said, “We’re making things so simple that you can do your taxes on a form the size of a postcard.” Also Treasury Secretary Steven Mnuchin said on Fox News Sunday that almost all Americans will be able to file their taxes on a postcard under the Republican tax overhaul. “Over 90 percent of Americans are going to fill out taxes on that postcard or a virtual electronic postcard,” Mnuchin said. “This is about simplifying taxes and simplifying the business system.”
Proponents of the bill claim that doubling the standard deduction and new limits on the deduction for state and local taxes will mean that millions of Americans will no longer benefit from itemizing deductions, thus simplifying their tax filing. The nonpartisan Tax Policy Center says that about 30 percent of those who currently itemize deductions for items such as medical expenses, investment interest, charitable donations or unreimbursed employee expenses will no longer do so under the new tax system, instead opting for the improved standard deduction, thus utilizing this postcard.
And it is very easy to complete as there are only 15 lines with four of them simple additions and subtractions. What’s not to like?
Well, maybe the tax preparation services will be unhappy.