On behalf of Silver Tax Group posted in Tax Law on Friday, January 26, 2018.
Recently named “America’s Comeback City,” Detroit has a lot to be proud of. As the economy evolves, Michigan’s largest city is thriving. The poverty rate is lower than the national average, its unemployment rate continues to drop and revitalization efforts are infusing new blood into neighborhoods.
More than one million blue-collar workers make up nearly 40 percent of the entire workforce in Detroit. The auto industry established the city as a hub for blue-collar workers. Automobile manufacturing companies are still the largest employers in the city with the healthcare industry employers in second place.
As a blue-collar worker in Detroit, the economy and changes at the government level directly affect you. Do you know how the new tax laws will affect your income this year?
How will the new tax laws affect me?
The sweeping tax law changes introduced by the Trump Administration will affect you no matter where you are on the pay scale. If you are a blue-collar worker in Michigan, you should see the following changes:
- Your standard deduction will nearly double, from $6,500 to $12,000 for singles, and from $13,000 to $24,000 for married couples filing jointly.
- While you will lose the personal deduction at the federal level, Michigan legislators are increasing your personal exemption at the state level to $5,000.
- Your tax rate will probably be lower than it has been in the past.
- You will no longer receive a penalty if you do not have employer-provided health insurance coverage starting in 2019.
- Some large businesses that are getting big tax breaks are passing along the savings to their workers by handing out bonuses.
Will my tax problems go away?
Just because the tax laws have changed, it doesn’t mean you can ignore problems regarding your taxes. Any issues you’ve had (or may experience in the future) with audits, back-tax payments, self-employment tax problems or other sticky dealings with the IRS or with the Michigan Department of Treasury will not go away.
The IRS is still the most powerful collection agency in the world, and state tax collectors are not far behind. If either of them are pursuing you for past due payments or are asking pointed questions about old tax returns, treat these issues as seriously as you do your work. Learn about your options before they garnish your hard-earned wages, tap into your bank accounts or worse.