Did you see the news re: the proposed tax plan? You might be thinking, what does this really mean? And how is this going to affect me?
Hello, this is Noel Dalmacio, your ultimate CPA at LowerMyTaxNow.
The White House presented the new tax plan last Wednesday. And compared to what I’ve discussed last November, 2016, there were not a lot of surprises. Now, the thing with a proposal is, they have a lot of work to do, before it becomes final. Because as of right now, we don’t know if this is going to pass or if it passes when it will be a law. So with that in mind, I would not tell you about the highlights but would tell you instead the winners and losers with the proposed tax plan. Here goes:
• Businesses with high tax rates – from 35% corporate income tax to 15%
• High-income earners – income around $470K then your tax rate will drop from 39.6% to 35%
• People with creative CPAs – this might open up a tax loophole since taxpayers might want to be structured as an S-corporation or LLC instead of employees.
• Multimillionaires who want “0” estate tax – this would take care of your taxes, if your estate is more than $5.5 million or $11 million for couples.
• People who are subject to AMT – the one who will benefit the most are high-income earners that have deductions subject to AMT adjustments (meaning you need to add back your deductions because you are not getting any tax benefits for AMT purposes).
• Donald Trump – surprise, surprise! All the items that I just mentioned just now will have a huge impact on Donald Trump’s taxes.
• Upper-middle-income people with high state tax rate – because the state tax that you are paying will not be tax deductible.
• Non-profit and charitable organizations – with the new proposal, the charitable deductions will be limited.
• Taxpayers – national revenue would decrease by $6.2 trillion over a decade. That means a large increase in the national debt or huge decrease in federal spending.
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Until then, this is Noel Dalmacio, your ultimate CPA at lowermytaxnow.com.