Recently Released: Trump’s Tax Reform Proposal

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Without providing any substantial detail or legislative text, earlier this week the White House presented a one-page document titled “2017 Tax Reform for Economic Growth and American Jobs”.

Here are some items that may affect individual taxpayers.

Tax Brackets

Three brackets may replace the existing seven-bracket structure. The new brackets would be set at 10%, 25%, and 35%.

Standard Deduction

The existing standard deduction could be doubled. Under the existing structure, individuals can deduct $6,350 and married couples can deduct $12,700.

Itemized Deductions

The plan would limit itemized deductions to mortgage interest and charitable contributions. A very popular deduction for State and Local Income Taxes would no longer be available (taxpayers residing in high-tax jurisdictions will feel the most impact).

Tax Relief for Families with Child and Dependent Care Expenses

No detail was provided as to how or if the existing dependent care tax credit and child tax credit will be modified.

Proposed Repeals

  • Repeal of the Alternative Minimum Tax
  • Repeal of the Estate/”Death” Tax
  • Repeal of Obamacare Tax (3.8% on Investment Income)

Although Treasury Secretary Steven Mnuchin said in his address Wednesday that the administration would like to move as fast as they can to pass the plan by year-end, the lack of transparency will lead to major congressional headwinds in the coming weeks and months.

For more information or questions, please contact Anatoli Pilchtchikov at 301.231.6200.

About Anatoli Pilchtchikov

Anatoli Pilchtchikov has written 14 post in this blog.

Anatoli Pilchtchikov is a senior manager in Aronson’s Personal Financial Services Group, where he specializes in tax compliance and consulting for high net worth individuals and their families, corporate executives and business owners. Working closely with clients and their investment and legal advisors, Anatoli plans and implements strategies designed to effectively achieve financial and estate planning objectives. As a trusted member of a client’s advisory team, he helps integrate financial plans with sound tax guidance in the areas of retirement and estate planning, risk management and investment planning.

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