On September 27, 2017, President Trump and the Republicans unveiled the elements of their tax reform framework.
Here’s a quick overview of some of the proposed changes:
Standard Deduction: Under the proposed framework, that standard deductions will approximately be doubled to:
- $24,000 for married taxpayers filing jointly, and
- $12,000 for single filers.
- However, while the standard deduction is increased, the personal exemption and additional standard deductions are eliminated.
Individual Tax Brackets: The number of tax brackets has been reduced from seven to three: 12%, 25%, and 35%. The corresponding income levels which will be applied to the proposed tax brackets has not yet been communicated.
Itemized Deductions: Under the proposed framework, most itemized deductions, including those for state and local taxes, will be eliminated. Deductions for charitable contributions and home mortgage interest will remain.
Alternative Minimum Tax (AMT): This framework for tax reform calls for the elimination of the AMT.
Corporate Tax Rate: The corporate tax rate would be reduced from the current 35% to 20%.
Small Business Tax Rate: Business income from small and family-owned businesses such as sole proprietorships, partnerships and S corporations would be taxed at 25%.
For a copy of the White House’s proposed tax reform framework, click here.
Also, the New York Times has a published an article, “Six Charts That Help Explain the Republican Tax Plan” by Alicia Parlapiano, which may be helpful in understanding the current proposals.
If you need assistance filing individual or business tax returns on extension, the tax attorneys at M. Robinson and Company may be able to assist you. Please feel free to contact us at 617-428-6900 with questions. The material in this publication does not constitute legal advice. It is intended for general information purposes only.
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