13 December 2016 Law firm clients: Year-end planning in light of potential US tax reform The Republican Party and President-elect Trump each have proposed substantive changes to US tax law. A comparison of the key elements of the President-elect's tax agenda and the House GOP Tax Reform Blue Print is available, as well as details around Mr. Trump's tax agenda. Key highlights of the proposed changes for individuals include: 1. Consolidation of the current seven tax rate brackets into three brackets of 12%, 25% and 33% and elimination of the Head of Household filing status. High-income taxpayers will benefit from the elimination of the Net Investment Income Tax and the Alternative Minimum Tax. 2. Itemized deductions to be limited to $100,000 ($200,000 for married couples filing jointly). At this point, there is no indication whether the deduction for charitable contributions or mortgage interest will be included or excluded in this overall limitation. 3. The childcare exclusion for children younger than 13 will be capped at the state average based on the age of the child; the eldercare exclusion will be limited to $5,000. Neither exclusion will be available to taxpayers whose income exceeds $250,000 ($500,000 for married couples filing jointly).
Document ID: 2016-2129 | |||||
