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.
Three brackets may replace the existing seven-bracket structure. The new brackets would be set at 10%, 25%, and 35%.
The existing standard deduction could be doubled. Under the existing structure, individuals can deduct $6,350 and married couples can deduct $12,700.
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.
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.