Local Financial Adviser Helps Explain Tax Bill

Now that the GOP tax bill is heading to President Trump's desk, Oregonians need to start getting ready for big changes.

Posted: Dec 20, 2017 6:39 PM
Updated: Dec 20, 2017 6:44 PM

MEDFORD, Ore. -- Now that the GOP tax bill is heading to President Trump's desk, Oregonians need to start getting ready for big changes. 

The final tax bill keeps the seven income tax brackets, but it lowers tax rates on all of them. Those rates will go back to their original numbers in 2026. 

Royal Standley, President and CEO of Oregon Pacific Financial Advisers, said the average, medium-income Oregon family will see tax reductions. 

"The big caveat here is all of the sunsets in 2025, so it's a question of how long will this last for," Standley said. 

Taxpayers used to be able to deduct state and local income tax if they itemized on their tax return. Now there's a cap at $10,000, which includes property taxes. 

Standley said now is the time for Oregonians to meet with a financial adviser to figure out exactly how the bill will affect them. 

"The tax bill that was passed is very complicated and touches a whole lot of planning decisions you've probably made in the past, and each person needs to really sit down with their advisers and set up a new plan," Standley said. 

Medford resident and retired teacher Fred Moore, said parts of the bill, like the 7.5 percent threshold for medical expenses, may be a positive thing, but he doesn't see them lasting forever. 

"That threshold is only lowered for two years, there's absolutely no promise that it's not going to go back up or be entirely eliminated," Moore said. 

The bill decreased the old threshold from 10 percent to 7.5 percent, which means people can deduct expenses that are 7.5 percent or more of their income. 

That is something Congressman Greg Walden said wasn't always going to be the case. 

"Medical exemptions, expenses were removed from the code and we actually came back and doubled down over the next two years and then back to about where it is now going forward," Walden said.

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