A new president is in the White House, and we can expect to see a number of big changes come into effect in the months ahead. Many of these changes will directly affect your finances, so it makes sense to be prepared for them.
Here are some of the ways that the new president along with current financial trends could affect your money over the coming months and years.
Income Tax Changes
One of the biggest changes that you are likely to see will come with your income taxes, and these will probably go down.
President Trump is planning to lower income taxes by cutting rates, and the plan is also to make tax planning simpler.
The existing seven brackets could see a shakeup and be reduced to three. Trump also wants to get rid of personal exemptions, and he plans to increase the standard deduction for both singles and married people.
The president is not responsible for interest rates, but it is still worth noting that they are likely to increase over the coming year, and this could have a big effect on your finances.
The Federal Reserve decided in December to increase short-term rates, and borrowing costs are definitely going up.
Although this does not affect long-term rates like lengthy mortgages, these are going up too. So if you are considering making a property loan application in California, this could affect you.
You may want to discuss this with a financial advisor to get professional advice. Although no one knows exactly what will happen with interest rates, a financial advisor can provide you with professional advice based on expectations for the months ahead.
Changes to Childcare
If you have young children, childcare costs might change over the coming months. Trump has proposed a number of changes that are mainly designed to assist working families, and these changes will reduce the cost of childcare for many working-class people.
One of the biggest changes is that he has proposed an above-the-line deduction for childcare that will be up to $5,000. There is no need to itemize it, and this will affect gross income.
There are likely to be other changes too, so speak to a tax specialist to find out more.
Health Care Costs
One of the big promises of Trump's campaign was to reform health care by repealing the Affordable Care Act. He will reform it in many ways, and essentially this will make it more expensive for some people.
It's very complicated, but you can certainly expect to see a few changes in this area.
Prepare for Changes to Your Personal Finances
We are likely to see many changes come into force over the next few months as President Trump seeks to bring changes to income tax, health care, and more.
How they will affect your finances may be complicated, and you may, therefore, want to seek professional advice to find out what you can expect.
A financial advisor can help you take steps right now that will help your financial future, and they will also keep a close eye on developments so they can provide you with advice on any changes brought in by the new administration.
Elise Dennis works in the mortgage and loans department and covers a range of important finance topics in her informative articles.
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