Below is a brief summary of President Trump’s Tax Proposal announced on April 26, 2017. The proposal was vague on details. As with any major tax legislation proposal, this process will take months to work through the House and the Senate. Some of the below provisions will be enacted in 2017. However, there is a high likelihood the effective date will be 2018. There is also a high likelihood many of the below provisions will be altered in a significant way. Some are calling this the biggest tax legislation overhaul since the 1986 Tax Reform Act which was signed into law by President Ronald Reagan. That was over 30 years ago.
Individual Tax Reform
- Reduce the 7 brackets to 3 brackets of 10%, 25% and 35%.
- Double the Standard deduction
- Relief for families with child and dependent care expenses
- Repeal Alternative Minimum Tax
- Repeal the Estate Tax
- Keep mortgage interest and charitable deduction but eliminate state and local income tax deductions.
- Repeal the 3.8% Obamacare investment income tax
- Top tax rate assessed on pass-through businesses, including small partnerships and sole proprietorships, to 15 percent from 39.6 percent
Business Tax Reform
- 15% business tax rate
- Territorial tax system to level playing field for American companies
- One time tax on repatriation of revenue from overseas back to the United States
Somerset CPAs will be tracking the legislation very closely and will be getting information such as the above summary out to all of you very quickly after legislation issues start to be clarified. Please email us at email@example.com or call us at 317-472-2200 regarding any of the issues below. We are here to assist and plan on your behalf.