Taxpayers and their advisors want to know as soon as possible — as in “now” — the impact of any upcoming tax law changes. We still don’t know many details, but the White House has proposed tax code changes which include both individual and business reform.
The upcoming months will see significant discussion and changes to the initial tax proposal put forward by the Trump administration. Until then, Americans will have to make plans based on the limited information made available at the White House press briefing to unveil the President’s tax reform plan on April 26, 2017.
Here’s a summary of the tax reform fact sheet that was handed out back in April:
Goals for Tax Reform
- Grow the economy and create millions of jobs — no details provided.
- Simplify the tax code.
- Eliminate targeted tax breaks that mainly benefit the wealthiest taxpayers.
- Protect the home ownership and charitable gift tax deductions.
- Repeal the Alternative Minimum Tax (AMT).
- Provide tax relief to American families — especially middle-income families.
- Reduce the seven tax brackets to three tax brackets — 10%, 25% and 35%.
- Double the standard deduction.
- Provide tax relief for families with child and dependent care expenses.
- Lower the business taxes.
- 15% business tax rate.
- Territorial tax system similar to American companies.
- One-time tax on dollars held overseas.
- Eliminate tax breaks for special interests.
- Other provisions
- Repeal the estate tax.
- Repeal the 3.8% tax on high-income wage earners.
The Trump administration and Congress still have a long way to go before new tax laws are drafted, argued over, and passed into law. That makes it tough for taxpayers and business owners to plan between now and then. Decisions that can’t wait should be based on available information, while keeping potential tax law changes in mind.