Soon folks nationwide will see the effects of the newly signed tax reform bill, which could mean major changes for faculty and staff for colleges and universities, including Penn State.
Ed Jenkins is no stranger to crunching numbers.
He’s an accounting instructor at the Smeal College of Business at Penn State.
“I’m also part of the Pennsylvania Institute of Certified Public Accountants and I sit on their Federal Tax committee,” Jenkins said.
And he’s made himself very familiar with the latest tax reform bill.
“I think the University community is going to significantly impacted,” Jenkins said.
Specifically for Penn State employees, who beginning in February will start to see the effects.
According to the Joint Committee on Taxation (JCT) six of the seven tax brackets have been reduced while one stays the same.
A pattern the JCT says could put $94 billion back in our pockets.
And a new higher standard deduction across the board is expected to produce upwards of $57 billion for taxpayers.
“But there’s a give-back. For those families that have children, especially are going to lose their dependency exemption for each dependent,” Jenkins said.
Each personal and dependency exemption was worth $4,050, that’s down to zero.
“Of course we have different pockets of employees. Some old, some young, we have quite a few that have families and the one’s with families will be impacted the most by the loss of the exemption,” Jenkins said.
According to the JCT, the government will earn about $93 billion in tax revenue alone — just by removing this exemption.
In addition Penn Stae employees will no longer receive deductions for moving expenses, state and local income tax or unreimbursed job expenses like trips for research of union fees.
And the kicker for Nittany Lion fans; entertainment expenses are also eliminated.
“I like to use football games as an example because..That’s a lot of money into the economy and it may alter the way that folks choose to spend money when they come to visit here because they may not be able to have a tax deduction for the entertainment expense,” Jenkins said.
Jenkins said he’s already receiving plenty of phone calls from concerned employees, but whether this bill is good or bad overall, he said it really depends on the individual case.
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