Local tax preparer weighs in on House GOP proposal
MADISON, Wis. — A local tax preparer said the House Republicans’ tax proposal, revealed Thursday , could be a mixed bag for Wisconsin taxpayers.
Marshall Mennenga, of Mennenga Tax and Financial, said one proposed provision of the bill, the elimination of most of the state and local tax deduction, could end up hitting Wisconsinites in the pocket.
“In the state of Wisconsin, since we pay a lot of state income taxes here, that deduction is going away,” Mennenga said.
The GOP is also proposing to eliminate the medical deduction, something he said could affect people dealing with high medical expenses, like from nursing home bills or major procedures.
“(It’s) a big thing,” he said. “More and more people are qualifying for that.”
When it comes to families, Mennenga says the proposal could bring beneficial results or cause a family to pay more in taxes, depending on their income level and size. He says standard deductions would nearly double for both singles and couples.
The proposal would also create two temporary $300 credits: one for nonchild dependents, like a sick elderly parent, and another for a child.
For most people, the bill would increase the child tax credit to $1,600.
Mennenga said eliminating the $4,000 personal exemption, which the bill proposes, could hurt larger families.
“That would hurt people with more than two children,” he said.
Mennenga said the GOP’s decision not to lower the cap on pre-tax 401K contributions from $18,000 in the bill was a relief.
“I’m glad they’re leaving that provision,” Mennenga said.
The plan seems to benefit high-income earners, instead of working- or middle-class taxpayers the most, Mennenga said.
“I did run one scenario this afternoon on a couple that was making $950,000, which is a lot of money,” he said. “Their taxes are going down by $27,000.”
Mennenga said as the plan stands right now, he doesn’t see how the proposal could be revenue-neutral.
“I have some concerns at the present time,” Mennenga said. “There are a lot of cuts. It’s supposed to be revenue neutral and I’m not sure where the other side of those cuts are going to appear.”
Click here for more information on the GOP tax plan.
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