Last week, President Trump released his tax reform plan “2017 Tax Reform for Economic Growth and American Jobs.” For individuals, the plan calls for lowering the current tax rates and reducing the number of tax brackets to only three: 10, 25 and 35 percent. It would also double the standard deduction, eliminate most itemized deductions other than home mortgage interest and charitable contributions, eliminate the estate tax, repeal the 3.8% Net Investment Income Tax and abolish the Alternative Minimum Tax. For businesses, the plan calls for a reduction in the top corporate tax rate from 35 percent to 15 percent (which would also apply to small business owners). On the international front, Trump’s plan provides for a one-time tax on repatriated profits from overseas investments and establishes a territorial tax system to replace the worldwide system currently in place.
The plan is not legislation – only a high-level proposal – and because of the significant debate expected, serious planning for this tax reform plan would probably be premature. For more detail on the proposed plan, click to see the CCH tax briefing. If you would like more information on how any of the Trump tax plan proposals might impact your particular tax situation, please contact your Elliott Davis Decosimo tax advisor.