Speaker 1: You’re watching KCCI 8 News.
Speaker 2: All right, I’m here with financial advisor Kurt Pearson. He’s here to talk about some taxes. So, we will be doing our taxes over the next couple of months. Are there any changes this year that we should know about?
Kurt Pearson: Yeah typically just kind of the annual changes where several different limit amounts and so forth get escalated because of a little bit of an inflation adjustment. So that’s something for people to take a look at. Of course the Affordable Care Act penalties really kick in this year and we know we’re going to be hearing a lot about that in the headlines, but the changes probably won’t take place for 2016, which are the taxes we’re preparing. The penalty could be as high $695 this year. So that’s really something for people to take a look at it. Of course, deductions for like savings accounts, deductions for IRAs, all those are escalating a little bit because of inflation.
Speaker 2: Okay, now with these changes can we expect more refunds?
Kurt Pearson: Well potentially but here’s the kicker. The IRS estimates 20% of tax filers leave about $6,200 of deductions on the table, and so some of these inflation adjustment amounts don’t have the potential impact of making sure that you are filling out your return correctly, you’re getting the exemptions that you’ve earned, that you deserve, you’re getting the standard deductions that you deserve and going through all of those other details with a good tax preparer to make sure that you’re claiming all of the deductions that you qualify for.
Speaker 2: Interesting. Okay, well we’re now learning more about President Trump’s tax proposals. Now what can you tell us about that aspect of it?
Kurt Pearson: Yeah, so some of the ideas that have been floating around are truly a simplification of some of the income tax brackets. Right now I think there are like six or seven different income tax brackets. The potential idea is to reduce that down to three, the highest bracket would come down. The corporate tax rate, which is a big deal for corporations, could also potentially come down. This is really something for people to keep an eye on as 2017 unfolds because if this legislation goes through and we see some adjustments you may want to go through the calculations to see if you’re withholding the right amount because you maybe could get a little pay raise as the year goes by if tax rates come down.
Speaker 2: Right.
Kurt Pearson: All of this needs to be vetted through a good CPA, through a good tax preparer who are the professionals in this line of work.
Speaker 2: Okay, so double and, again, triple check with someone who knows what they’re doing. Good advice there. Again this is Kurt Pearson. His information is on your screen with Compass Financial Services and that number is right there, 515-327-1020. Thanks for joining us and we’ll be right back after this.