4 big tax breaks you may lose under GOP tax plan

Personal Finance

Who uses the mortgage interest deduction, by income

0 to $50,000 2.32 million $1.11 billion
$50,000 to $100,000 9.77 million $9.19 billion
$100,000 to $200,000 14.6 million $24.85 billion
$200,000 & up 7.18 million $29.78 billion
Totals: 33.87 million $64.93 billion

Source: 2016 data from Joint Committee on Taxation report. *Income ranges include AGI plus variety of untaxed items (i.e., employer contributions to health care plan, nontaxable social security benefits, etc.)

While there’s no guarantee, the wording suggests that the intent is to retain the pretax status of contributions to retirement plans such as 401(k) plans, along with keeping the deduction for higher education.

Beyond that, the assumption is that everything else is on the table.

While a higher standard deduction would offset the loss of tax breaks for some people, remember that personal exemptions would disappear under the GOP plan, meaning the “doubling” of the standard deduction as it’s been pitched is a bit misleading.

For instance, an individual filer who takes the current standard deduction of $6,350, along with a personal exemption worth $4,050, saves $10,400. Under the Republican plan, their standard deduction would be $12,000. That’s a difference of $1,600.

Of course, that same taxpayer could save additionally through a proposed expansion of the child tax credit (if they have children) and a potentially lower marginal rate.

Here are some popular benefits that could be on the chopping block to help pay for tax reform. Keep in mind that these are only a few of the bigger ones in terms of revenue lost by the government; dozens of others that apply to smaller numbers of taxpayers also could be under consideration.

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