Originally published on Forbes.com.
I was gloating on Facebook about how good the coverage of the Tax Cuts And Jobs Act is on this platform . I was not just patting myself on the back. As I write this my covivant and business partner is listening to Tony Nitti giving a Surgent webinar. And of course there is Kelly Erb – the Tax Girl – and our esteemed editor Janet Novack among others. My post triggered a fairly passionate exchange among my facebook friends. I’ll describe that very briefly.
Two of the guys who tend to lean right said it was because I deal in facts as opposed to the left leaning publication I was invidiously comparing. One of the others weighed in that the lawyer and the retired Army officer knew jack about what happens in a newsroom. The journalist turned playwright producer actor schooled me that maybe my stuff was good. But for whom? Other accountants? When he was trained reporters wrote for a seventh grade reading level, because that was what most people who read newspapers had.
So I thought I would take up the challenge and see if I could explain the over thousand pages Joint Committee report in a way that would tell a regular person what they are interested in in a way that they can understand with reasonable accuracy.
I decided to go with a Q&A format. My imaginary friend Thomas and his spouse make enough so that they are past the earned income credit. They pay some federal income tax. Thomas is divorced and remarried. I decided to go with a Q&A format.
Thomas Everyman: Will I be getting a bigger refund this year?
Peter Reilly: No. The bill is about the money you make next year and a few years after that.
Thomas: Will I have more take-home pay?
Peter: Probably. Maybe starting in February. If the payroll department at work does not have its act together it might take longer. If they don’t figure it out you will have more coming back to you or owe less when you file in 2019.
Thomas: Do you think I will start doing the long-form?
Peter: If they don’t change the law you will never itemize. That’s what we call filing the long-form.
Thomas: Can I still write off the alimony?
Peter: Yes. You can keep writing off the alimony to Jane, but you won’t be able to write off alimony if you divorce Sally.
Thomas: No worry. She’s a keeper.
Peter: That’s good.
Thomas: What’s that form that you told me I need to write off the kids?
Peter: Form 8332. Here is a link.
Thomas: Will I have to keep getting it after the one for this year?
Peter: I’m not sure. You no longer write off the kids, but there is still a child credit to fight about.
Thomas: I heard a lot of this stuff expires in a few years.
Peter: Yeah, but don’t worry about that. They will probably change it before then anyway.
Thomas: Will I be able to do my own return after this?
Peter: You could do your own return now.
Thomas: Yeah but I like getting it done while I go shopping for fishing gear. You think they will charge me less in 2019, because it will be easier?
Peter: No.
Thomas: Why?
Peter: They wouldn’t make as much money.
Thomas: Are the rich guys, like the ones the President talked about upset because they will be paying more like he will be?
Peter: Not any of the rich guys I know.
Thomas: Do you think he was lying?
Peter: Maybe he knows a different type of rich guy than I do.
Thomas: Maybe I shouldn’t have voted for him.
Peter: Yeah, I know what you mean. But there’s Whitewater and the pantsuits and the pizza pedophiles. And the emails. Don’t forget about the emails .
Thomas: Yeah the emails.
Thomas: I hear there is a break if I switch to a 1099?
Peter: That’s true. It is close to a wash with the extra social security you have to pay, so I wouldn’t get that excited about it. Also, you might be able to write off some expenses but that’s not any different, except you wouldn’t be able to write off Red Sox tickets unless you start a sports blog.
Thomas: So do you think I should start my own business?
Peter: If you were the type of person who would do well starting his own business, you wouldn’t be asking me if you should.
Thomas: Is there other stuff about the tax act that is interesting even if it doesn’t matter to me.
Peter: Do you mean stuff that I can explain without giving a long explanation that is pretty technical?
Thomas: Right, right. Stuff that people who don’t know anything about taxes can understand in a couple of sentences.
Peter: The top tax rate for corporations went down from 35% to 21%.
Thomas: That is kind of interesting. Anything else?
Peter: No.
Thomas: Really?
Peter: Well they are cutting the excise tax on beer.
Thomas: So you think they will cut the price of beer?
Peter: No.
Thomas: Why?
Peter: They won’t make as much money if they do.
I read this to my covivant. She doesn’t think I nailed it. I’ll have to see what my high school buddies think.