Trump’s tax reform at a glance: potential impact on individuals and businesses

by The ARB Team

The President and certain Republican leaders unveiled a new tax framework yesterday that may start making its way through the legislature.

Individuals:

  • Reduce individual tax brackets to 12%, 25% and 35% (with additional top rate tax for the highest income earners)
  • Increase standard deduction to $24,000 for married filing joint and $12,000 for single filers.
  • Eliminating the Alternative Minimum Tax
  • Eliminating most itemized deductions, except mortgage interest and charitable contributions
  • Repeal of the estate tax and generation skipping transfer tax

Businesses:

  • Maximum tax rate of 25% for income of sole proprietors, partnerships, and S Corp income
  • Maximum tax rate of 20% for C Corp income
  • Immediately expense equipment purchases rather than depreciating
  • Elimination of the domestic production activities deduction
  • No taxation of dividends from foreign subsidiaries

 

At best we can say something may change, but with the difficulty of getting any bipartisan support for proposals we have no clear direction of when or what will change.  Stay tuned! Or contact your ARB advisor with any questions.

Here’s a link to the full proposal

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