The Trump Administration served its opening volley on tax reform. Although short on details and sure to be extensively debated and modified by Congress, it does offer us some insights on where the debate may be headed. Of special importance is the omission of some key campaign proposals. These include the border tax, potential limitations of mortgage interest, and charitable donation.
The Ciuni & Panichi team continues to watch the developing details of tax reform, keeping our clients in mind. We will keep you abreast of major changes in proposals that will affect you and your businesses.
Summary of Trump’s Tax Plan
- The business tax rate is reduced to 15 percent. This includes all businesses even partnerships, S Corporations, and sole proprietors.
- The number of income tax brackets will be cut from seven to three, with a top rate of 35 percent and lower rates of 25 percent and 10 percent. It is not clear what income ranges will fall under those brackets. It would double the standard deduction.
- It would eliminate most tax deductions. The mortgage interest and charitable contribution deductions would be retained.
- Estate tax, otherwise known as the “death tax” will be eliminated.
- There will be a “one-time tax” on the trillions of dollars held by corporations overseas.
- The U.S. would go to a “territorial” tax system. Such systems typically exclude most or all of the income that businesses earn overseas. Most developed countries use this model.
- Repeal of the alternative minimum tax and 3.8 percent Obamacare taxes.
Contact Jim Komos at 216.831.7171 or firstname.lastname@example.org for more information.