With Donald Trump as the President elect, there are a lot of questions on his proposed tax plan. We don’t know which changes will ultimately be adopted but thought it would be helpful to outline what is being considered, and if implemented how it could affect you.
- Individuals with adjusted gross income (AGI) up to $15,000 or Married filing joint (MFJ) up to $30,000 will not be subject to income tax.
Exemptions, Deductions, and Credits
- Itemized deductions would be capped at $100,000 for single filers and $200,000 for Married Filing Jointly
- The standard deduction would increase to $15,000 for single filers and $30,000 for Married Filing Jointly, and personal exemptions would be eliminated
- Above-the-line deductions for childcare for up to four children or elderly parents would be capped
- The deduction would be phased out for individuals earning more than $250,000 or couples earning more than $500,000
- Rates would be capped at 15%, reduced from 35%
- Corporate alternative minimum tax would be repealed
- Estate tax would be repealed, but capital gains exceeding $10 million that are held until death would be subject to tax
- A one-time deemed repatriation tax of 10% would be levied on corporations with cash held overseas
- The deferral of corporate income earned abroad would be repealed
We will continue to monitor the proposed changes and how it may impact our clients from a planning standpoint.