Possible Tax Revisions Due to the Election of Donald Trump

By:  |  Category: Blog Tuesday, November 29th, 2016  |  No Comments
Trump and taxes possible tax revisions due to the election of donald trump
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Throughout the U.S. presidential campaign, tax reform was a major talking point of candidate (now president-elect) Donald J. Trump.  With his election on November 8, here is a summary of potential tax changes that may come after his inauguration:

Individuals

Tax Rates

  • Ordinary income tax rates across the board will be cut to just three marginal rates: 12, 25 and 33% (chart below reflects joint filers):
  • potential trump tax changes chart

 

 

 

 

 

 

 

 

  • Repealing the 3.8% Net Investment Income Tax (NIIT) on passive and investment income.
  • Repealing the 0.9% Medicare tax on wages and self-employment income over a certain threshold.
  • Eliminate the Alternative Minimum Tax (AMT).

Deductions

  • Increase standard deduction to $15,000 and $30,000 for single and joint filers respectively.
  • Limit itemized deductions to $100,000 and $200,000 for single and joint filers respectively.
  • Eliminate personal exemptions

Estate & Gift

  • Repeal the estate and gift tax completely.
  • Stepped-up basis at death disallowed for taxable gains over $10 million.

 

Businesses

Tax Rates

  • Reduce the top corporate tax rate from 35% to 15%.
  • Business income from pass-through entities (partnerships, S-corporations, & sole proprietorships) will be taxed at 15%.
  • Eliminate corporate AMT.
  • One-time 10% tax on the repatriation of foreign earnings.
  • Tax carried interest at ordinary tax rates versus capital gain rates.

Deductions

  • Increase Section 179 expensing limit from $500,000 to $1 million.
  • Manufacturing companies can elect to expense all new capital expenditures.
  • Eliminate the deduction for various corporate tax expenditures.

 

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