Roger Stein, CPA, was the third speaker in our Rotary member’s presentation series. Prior to beginning, he wanted to remind us that phone calls claiming to be from utility companies or the IRS are often most likely scams and we should proceed with caution before giving out any personal information. Income tax was ratified by the 16th Amendment in 1913, with a tax rate of 1-7%. This increased to 77% with WWI and peaked at 94% during WWII, but was steady during the 50’s, 60’s and 70’s at 70%. The Economic Recovery Act of 1981 slashed the top rate of 70% to 50%. The Tax Reform Act of 1986, sponsored by Richard Gebhardt (House) and Bill Bradley (Senate) required social security numbers for dependents over the age of 5 (immediately 7m dependents vanished), and the tax rate from 50% to 38.5%. With this act credit card and consumer loan interest was no longer deductible. More recently, the 2018 Trump tax changes have standard deductions of $12,000 for a single person, $18,000 for head of household and $24,000 for a joint return. The details and implications for both individuals and businesses were numerous, and Roger (or your tax accountant/advisor) can explain how these will affect you, your family or your business. But one last point is that while there is no longer a federal mandate for a family to have health insurance, there will be a penalty tax in the state of NJ of $695 per family member up to a maximum of $2085 or 2.5% of the household income, whichever is greater. Roger also left us with the thought that the new tax law adds $1.5T to the national debt, with the economy performing well. A debt that our children and grandchildren will have to pay.Roger Stein CPA
Roger Stein, CPA, was the third speaker in our Rotary member’s presentation series. Prior to beginning, he wanted to remind us that phone calls claiming to be from utility companies or the IRS are often most likely scams and we should proceed with caution before giving out any personal information. Income tax was ratified by the 16th Amendment in 1913, with a tax rate of 1-7%. This increased to 77% with WWI and peaked at 94% during WWII, but was steady during the 50’s, 60’s and 70’s at 70%. The Economic Recovery Act of 1981 slashed the top rate of 70% to 50%. The Tax Reform Act of 1986, sponsored by Richard Gebhardt (House) and Bill Bradley (Senate) required social security numbers for dependents over the age of 5 (immediately 7m dependents vanished), and the tax rate from 50% to 38.5%. With this act credit card and consumer loan interest was no longer deductible. More recently, the 2018 Trump tax changes have standard deductions of $12,000 for a single person, $18,000 for head of household and $24,000 for a joint return. The details and implications for both individuals and businesses were numerous, and Roger (or your tax accountant/advisor) can explain how these will affect you, your family or your business. But one last point is that while there is no longer a federal mandate for a family to have health insurance, there will be a penalty tax in the state of NJ of $695 per family member up to a maximum of $2085 or 2.5% of the household income, whichever is greater. Roger also left us with the thought that the new tax law adds $1.5T to the national debt, with the economy performing well. A debt that our children and grandchildren will have to pay.