With tax filing season starting next week, most people are focused on their 2016 income taxes. Others are focused on tax planning for 2017 and beyond. They are laser-focused on upcoming tax changes based on proposals laid out by President-elect Donald Trump during his campaign. His proposed tax law changes include reducing some tax rates and increasing some deductions.
Making plans when the rules are changing is a real challenge. Tax professionals make educated guesses based on their experience and by tracking the proposed policy changes to see which ones are actually implemented. So what can tax professionals and their clients expect in the coming months?
Six tax change proposals we could see in 2017:
- The Middle Class Tax Relief and Simplification Act would provide middle class families with two children a 35% tax cut.
- Affordable Childcare and Eldercare Act would allow individuals to deduct childcare and elder care expenses.
- Reduce the Current Seven Tax Brackets to Three individual tax rates. The current 10% and 15% brackets would be changed to 12%; the 25% and 28% tax brackets would be at 25%; and the highest tax bracket would be 33%.
- Changes to Business Taxes, such as a flat 15% corporate income tax rate and elimination of the corporate alternative minimum tax (AMT).
- Repeal and Replace the Affordable Care Act and replace with a Republican proposed plan with some modifications.
- American Energy and Infrastructure Act which is described as a proposal to spur $1 trillion of infrastructure investment over the next 10 years.
Which proposals will be approved by Congress and signed off by the President? You can be sure we’ll pass on those changes in our weekly blog posts and monthly newsletter. Stay tuned…