Trump Tax Plan is Finally Here on Time for the Holidays
The benefits of doing business in the U.S. are increased after the approval of the tax reform. CNN Money recently reported the final changes to the tax code under the Trump Tax Plan approved by both Congress and Senate. Below an interesting summary.
- Individual tax rates up to 37%. Click here for a full detail of the new brackets.
- Doubled Standard Deduction: Increased to $12,000 for singles, up from $6,350 and $24,000 for married couples.
- Personal Exemption: Eliminated.
- State and Local Tax (SALT) Deduction: Limit taxpayers to a combined deduction for state and local income taxes and property taxes of $10,000;
- Child Tax Credit: Doubled to $2,000 for kids under 17.
- Relative Dependents Credit: $500 credit is created for non-child dependents and older than 17 years old relatives.
- Mortgage Interest Deduction: Allow homeowners to deduct the interest on up to $750,000 in mortgage debt and deletes any home equity line interest deduction.
- Estate Tax: The amount subject to estate tax is doubled to $10.98 million.
- Obamacare Penalty. Eliminated. You will not be obligated to buy insurance.
- Tax Filing: Some taxpayers, such as employees, will be able to file thru a postcard system sent by the IRS. Click here to read more.
- Alternative Minimum Tax: Income base to impose AMT are increased to $70,300 for singles and $109,400 for married couples.
- 529 Prepaid Education Plans: Prepaid Education plans will be available to pay elementary and high school education expenses in addition to college education expenses.
- Corporate Rate: 21%, taking effect in 2018;
- Corporate Rate for Multinationals: companies will be able to bring their overseas profits by paying 15.5%
- Alternative Minimum Tax (AMT): Eliminated.
- Pass-Through Entities: 20% tax rate for profits of pass-through entities such as Scorps and LLCs, except for professional service firms such as accountants or attorneys with a taxable income over $315K for married couples and $157.5K for singles.
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