Follow Adam Linkedin Twitter Facebook
Email Adam Email
Financial
Oct 2, 2017

The 2017 Tax Reform Framework

Sponsored Content provided by Adam Shay - Managing Partner, Adam Shay CPA, PLLC

Did you realize the US income tax code has not had a major overhaul since 1986?

The GOP Tax Reform Framework has recently been released. I’ll do my best to summarize various items that have been proposed and to spell out some of the implications of the proposal- some of which may not be apparent to people that do not live and breathe the tax code. 

Keep in mind that you should only make tax planning moves and implement tax strategies around the current tax code, not guess the future. 

The proposal includes:

  • Increasing the Standard Deduction.The standard deduction would increase to $24,000 for couples filing jointly and $12,000 for single filers. This would almost double the standard deductions. For most Americans, this would mean that mortgage interest no longer provides a tax benefit.  In addition, personal exemption deductions would be eliminated, so this change may not be as attractive as it sounds.
  • Individual Income Tax Rate Structure Changes. There would three brackets of 12, 25 and 35 percent.The cutoff for the brackets has not been released so it is tough to assess the true impact of this.
  • Significant Increase of the Child Tax Credit. The significance of the change has not been released.  Any increase in the child tax credit could be offset in losing personal exemption deduction for dependents. The phase-out limit for the child tax credit would also increase.
  • Alternative Minimum Tax (AMT) Repeal. In simplistic terms, AMT is a method of calculating a tax a second way for people in certain income and deduction ranges. The individual is then assessed tax at the level of the higher of the two tax calculations. 
  • Estate Tax. Currently, the estate of anyone with over $5.49 Million in assets is assessed a tax when the assets change hands. This tax would be repealed and would benefit the wealthiest of Americans.
  • Lower Maximum Income Tax Rate Limit for Small Business Income. The maximum income tax rate for business income for sole proprietorships, S corporations, and partnerships would be 25 percent.
  • Lower Maximum Income Tax Rate Limit for Corporations. The maximum income tax rate for business income for C corporations (publicly traded companies plus small businesses that elect to be taxed as a C corporation) would be 20 percent.
  • Immediately Be Able to Expense Capital Assets. For at least five years, businesses will be able to immediately expense the cost of depreciable assets.
  • Limiting Interest Deduction of C Corporations. Specifics of how much interest deduction will be limited has not been released

There will be some challenges related to implementing tax changes. As you know, there have been challenges in Washington of arriving to consensus and agreements. Will all the necessary parties get on the same page? It will also be interesting to see how the proposed structure actually takes shape.  Special interest groups that are adversely impacted or not receiving enough benefits will continue heavy lobby efforts.  That is one of the reasons our tax code gets so convoluted. 

My goal today was to update you on potential tax law changes. If you have any questions, concerns or feedback, please feel free to reach out to me.

Adam Shay, CPA (N.C. License Number 35961), MBA, is managing partner of Adam Shay CPA, PLLC. He focuses on minimizing taxes and improving the financial results of entrepreneurs, and is actively involved in supporting the Wilmington entrepreneurial and startup community. For more information, visit http://www.wilmingtontaxesandaccounting.com/ or email him at [email protected]. He can also be reached by phone at (910) 256-3456.
 

Other Posts from Adam Shay

Adam shay blk 52015121549
Ico insights

INSIGHTS

SPONSORS' CONTENT
Johndevaneycapefearclinic300x300

Cape Fear Clinic Pharmacy

John Devaney - Cape Fear Clinic
Rob20beale2 311791810

The Key to Project Success

Rob Beale - W.M. Jordan Company
Geofflosee300x300 10221511305

Got Flood Insurance? Get That Proof of Loss Form in Quickly!

Geoffrey Losee - Rountree Losee LLP

Trending News

Family-owned Artisan Market Planned For Third Street Property

Christina Haley O'Neal - Feb 15, 2019

Changing Tides

Laura Moore - Feb 15, 2019

Brunswick County Has Second-strongest January Home Sales

Johanna Cano - Feb 15, 2019

Food Hall Trend Coming To ILM

Kyle Hanlin - Feb 15, 2019

Pushing Investment Crowdfunding

Johanna Cano - Feb 15, 2019

In The Current Issue

Food Hall Trend Coming To ILM

Food halls have been popping up throughout the United States, often in downtown cores. Some estimates predict that there could be more than...


Changing Tides

While some might expect the growth spurt in the town of Carolina Beach to cause major growing pains, town officials say the challenges posed...


Housing Market: When History's For Sale

Homebuyers in the market for a historical dwelling seem to have at least one thing in common: a love of storied structures, big or small....

Book On Business

The 2019 WilmingtonBiz: Book on Business is an annual publication showcasing the Wilmington region as a center of business.

Order Your Copy Today!


Galleries

Videos

Health Care Heroes 2018
2018 WilmingtonBiz Expo - Keynote Lunch with Eric Dinenberg, Rouse Properties