Proposed Changes Under the "Tax
Cut and Jobs Act" Now in Congress
Below please find a summary of some of the proposed changes to our tax laws. These changes will impact many of you so it is important that you are aware of the effect they can and will have on your 2017 & 2018 tax returns. At the end of the changes we will discuss tax savings. The chart below shows the current tax rates versus the changes proposed under the tax plan currently in Congress.
| 2017 (Current) | Proposed Under Trump Tax Plan | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Tax Bracket | Single Filer | Joint Filers | Single Filer | Joint Filers | Tax Bracket | ||||||
| 10% | $0 - $9,325 | $0 - $18,650 | $0 - $45,000 | $0 - $90,000 | 12% | ||||||
| 15% | $9,326 - $37,950 | $18,651 - $75,900 | |||||||||
| 25% | $37,951 - $91,900 | $75,901 - $153,100 | $45,001 - $200,000 | $90,001 - $260,000 | 25% | ||||||
| 28% | $91,901 - $191,650 | $153,101-$233,350 | |||||||||
| 33% | $191,651 - $416,700 | $233,351 - $416,700 |
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| 35% | $416,701 - $418-400 | $416,701 - $470,700 | |||||||||
| 39.6% | $418,401 or more | $470,701 or more | |||||||||
Important Changes to Deductions
Above the line Changes
Deductions for alimony paid under decrees of divorce after 12/31/17 will not be taxable to the recipient nor will they be deductible by the payer.
Moving Expenses related to a change of employment will no longer be deductible.
Deductions
No deduction will be allowed for Medical expenses.
No deduction will be allowed for State and Local Taxes.
(Income, Sales, Sales tax on Autos, etc.).
A deduction for real estate taxes will be limited to not more than $10,000.
Mortgage Interest deduction will be limited on loans after 11/02/17 to not more than $500,000.
The Standard deduction for single taxpayers will increase to $12,000 for singles and $24,000 for married.
Other Items
Energy Credits will be eliminated for individuals including the $7,500 credit for electric cars.
Alternative Minimum Tax will be eliminated.
THIS IS HUGE!!!
The estate tax deduction is almost doubled to $10,000,000 and will be fully repealed in six (6) years. Also the gift tax is lowered to a maximum rate of 35% from 45%.
For all our business clients, be aware the proposal is for a 20% flat tax, the elimination of most tax credits except the research credit, no minimum tax, and 100% deductible asset purchases of up to $20 million (except real property).
There are a number of other changes that are proposed. These can be discussed later but, the above items are the ones affecting the majority of our clients. There is limited amount of time to consider several items that will increase your tax savings for 2017.
New! Download a breakdown comparing the House and Senate Versions of the Tax Bill.
Please call our office at (847) 398-7010 to discuss what can be done. We welcome new clients and our rates for individual tax returns are competitive even with most pop-up storefront "tax return mills." So why settle for a part-time tax preparer when you can have a full-time tax pro working to get you every deduction you're entitled to?