Trump Is President….Now What Happens to Your Taxes?
On January 20, Donald Trump took the oath of office as the 45th President of the United States. He has the full support of a Republican House and Senate, meaning an end to the gridlock of the past six years. What effect will his inauguration have on your taxes?
Trump has proposed a conventionally Republican suite of changes: lower rates, new deductions for families, and incentives to repatriate foreign earnings. At the same time, he has proposed to limit certain breaks and cap overall itemized deduction.
However, these are just the latest of several proposals Trump floated during the campaign. Trump appears to be less focused on policy details than on broad themes, so we shouldn’t be surprised if he lets Congressional Republicans take the lead on tax planning policy.
- Cut brackets to three: 12-25-33%
- Boost standard deduction to $15,000 ($30,000 for joint filers)
- New deduction for individual health insurance premiums
- New deduction for child care costs and “dependent care savings accounts”
- Limit itemized deductions other than mortgage interest and charitable gifts
- Cap itemized deductions at $100,000 ($200,000 for joint filers)
- Tax “carried interest” as ordinary income
- Repeal Alternative Minimum Tax
- Repeal “Obamacare” taxes
- Repeal Gift & Estate Tax
- Repeal stepped-up basis on gains over $10 million
- Eliminate deferral of tax on foreign business income
- Impose 10% repatriation tax on accumulated profits of foreign subsidiaries
- Repeal most business tax incentives (except R&D)
- Reduce Corporate tax rate to 15%
Of course, who knows what changes will actually happen, but there will be changes!
Are you worried what might happen to your taxes under President Trump? Call us for a free Tax Analysis at 240-356-5050. We’ll tell you where your opportunities lie, and work with you to take maximum advantage of any existing and new rules!