Proposed Tax Changes

Proposed Tax Changes

| February 01, 2017

With Donald Trump now the 45th President and the Republicans controlling the House and Senate, many tax professionals feel we are likely to see a number of tax changes in the year ahead if his campaign plans and promises hold. President Trump’s campaign website was light on the details but the following are various tax proposals as set forth on Trump’s campaign site. Here is some of what they have proposed:

    • Federal tax rates and brackets would be simplified down to three versus the current seven today. Those with a taxable income between $0 and $37,500 ($0 to $75,000 for married filers) would be subject to a 12% tax rate, taxable income between $37,500-$112,500 for individuals ($75,000-$225,000 for married filers) would be subject to a 25% rate, and those with taxable income above $112,500 ($225,000+ for married filers) would be subject to a 33% federal tax rate.

    • The standard deduction would more than double to $15,000 for single filers to $30,000 for married couples filing jointly while ending personal exemptions.

    • Itemized deductions would be capped at $100,000 for single filers and $200,000 for married couples filing jointly.

    • Elimination of the 3.8% tax on net investment income on people with incomes (MAGI) of over $200,000 for single filers and $250,000 for married filers.

    • Tax rates on long-term capital gains would be kept at the current 0%, 15% and 20%.

    • A full repeal the alternative minimum tax (AMT) and the estate tax. Under current law, estates valued at more than $5,490,000 are subject to a 40% tax rate.

    • The individual mandate (or Obamacare tax as some call it) would also be repealed in 2017, meaning that penalties would not result if people don’t have health insurance.

All final plans will need to be approved by Congress. Many times, to get wide scale tax reform passed across all branches of government, there are compromise tax plan agreements. Our goal is to keep watching these tax changes as they progress.

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.