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Are you a winner or loser under tax reform?

Michael Gray, CPA speculates about who will pay more or less under tax reform


San Jose, California, USA – WEBWIRE

"President Trump says everyone would be better off under tax reform, but it ainít necessarily so!", says Michael Gray, CPA.

Many Americans are wondering whether they will pay more or less taxes under tax reform proposals outlined by President Trump and the tax-writing committees in Congress.

President Trump says everyone will be better off, but it ainít necessarily so.

U.S. multinational corporations with accumulated earnings parked offshore are winners.† They would repatriate those funds at reduced tax rates, payable over up to five years.

U.S. business owners are also winners.† Those who are individuals would see their maximum tax rate on business income fall from 39.6% to 25%.† The maximum corporate tax rate would fall from 38% to 20%.† Investments in equipment would be currently deductible for at least five years.

Very wealthy families are winners.† The federal estate tax would be repealed.† (Since there is currently almost an $11 milliion exemption for married couples, only the very wealthy pay estate taxes at 40% for the excess.)

High income individuals are winners.† The maximum income tax rate would be reduced from 39.6% to 35%.† The additional 3.8% tax on net investment income is also proposed to be repealed.

Very large families are losers.† The personal exemption would be repealed.† The current $12,700 standard deduction for married couples plus three personal exemptions totals a combined deduction of $24,850, which is more than the proposed standard deduction.† Itís like losing the deduction for the personal exemption for any more dependents.

Single parent families are losers.† It appears head of household filing status, a very significant tax break for single parent families, would be eliminated.

People who live in states with high income taxes are losers.† The deduction for state income taxes would be repealed.

People who pay high real estate taxes are losers.† The deduction for real estate taxes would be repealed, eliminating a significant tax benefit of home ownership.



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