
The
four primary objectives of the plan are: 1) to grow the economy and create
jobs; 2) simplify the Internal Revenue Code; 3) provide tax relief to American
taxpayers; and 4) lower the tax rate on businesses.
The
first method of individual income tax reform is through reduction of the number
of tax brackets. The number of applicable tax brackets will be reduced from 7
to 3, with remaining brackets of 10%, 25% and 35%. However, the specific income
thresholds for each bracket are still to be determined. At the current time, the
most important aspect of this specific change is the reduction of the highest
individual tax rate from 39.6% to 35%.
Additionally,
the proposed tax reform references the following items which will have a direct
impact on individual taxpayers:
1) The standard deduction will be doubled from
$12,700 to $25,400;
2) Repeal of the 3.8% net investment income tax;
3) Repeal
of the alternative minimum tax
4) Additional
provisions to be provided for child and dependent care expenses; and
5) Repeal
of the “death” tax.
Please
stay tuned throughout the next few months as the administration will hold
listening sessions with stakeholders to receive input and work with Congress to
develop the details further. However, in the interim, please do not hesitate to
contact our office should you have any questions about the proposed Trump tax
reform.
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