Smart Money: President-Elect Trump's Tax Plans

While on the campaign trail, Donald Trump promised big tax cuts for everyone. Today in Smart Money, Chris Harper, who's an Instructor at Grand Valley State University and Senior Manager with Hungerford Nichols is here to talk with about the President-E

OVERVIEW

·         Remember that tax legislation must still go through the political process.

·         Tax legislation originates in Congress and is ultimately signed into law by the president.

·         These highlights from Mr. Trump’s campaign are not guaranteed to become law as presented. Actual results will almost certainly vary.

·         This is not a complete list; it is a summary of the salient provisions that could affect WZZM’s viewers.

 

INDIVIDUAL TAX ISSUES

·         Reduce the number of tax brackets from seven to three

   12% ($0 - $75,000 taxable income for a married couple filing jointly)

   25% ($75,000 - $225,000 taxable income for a married couple filing jointly)

   33% (above $225,000 taxable income for a married couple filing jointly)

·         Eliminate head-of-household status

·         Increase the standard deduction

   Increase from $6,300 to $15,000 for single taxpayers

   Increase from $12,600 to $30,000 for married couples filing jointly

·         Eliminate personal exemptions.

·         Cap itemized deductions at $100,000 for single taxpayers and $200,000 for married couples filing jointly.

·         Eliminate the Net Investment Income Tax.

·         Eliminate the Alternative Minimum Tax (AMT).

·         Implement a new credit for child care expenses for low-income taxpayers (administered through the Earned Income Tax Credit).

·         Implement new tax-free dependent care savings accounts to pay for the care of children and/or elderly parents (with the remainder eligible for educational expenses).

·         Make child care costs deductible up to a state-specific maximum (phased out for high-income taxpayers).

 

BUSINESS TAX ISSUES

·         Reduce the top corporate tax rate from 35% to 15%.

·         Move toward full expensing of capital improvements (choose between this and deducting interest expense).

·         Eliminate most tax credits with the exception of the Research & Development Credit.

·         Eliminate the Domestic Production Activities Deduction.

·         Eliminate the corporate AMT.

·         End the deferral of overseas corporate income tax.  Tax the “deemed repatriation” of foreign income at a 10% rate.

 

OTHER ISSUES

·         Eliminate the estate tax.

·         Disallow the basis step-up for estates over $10 million.

Courtesy: Chris Harper, Senior Manager, Hungerford Nichols

(© 2016 WZZM)


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