Planning Briefs

What Are The Main Items On Trump's Tax Reform Agenda?

Published Tuesday, November 22, 2016 at: 7:00 AM EST

President Donald Trump is making tax reform one of the top priorities in the early days of his administration. Although there are no guarantees, some or all of his proposals may be approved by a Republican-led Congress, possibly with modifications. These are among the key items on the agenda:

Replacing the seven-tier income tax rate structure for individuals with three brackets of 12%, 25%, and 33%.
Eliminating some itemized deductions or limiting the dollar value of deductions claimed on personal returns.
Reducing the top corporate income tax rate from 35% to 15%.
Repealing the estate tax and replacing the step-up in basis for inherited assets with a carryover basis rule or income tax consequence at death.
Repealing the 3.8% surtax on net investment income.
Repealing the alternative minimum tax.
Curbing the benefits of stretch IRAs.
Providing immediate deductions for investments in businesses.
Doubling the maximum Section 179 allowance from $500,000 to $1 million and revamping depreciation deduction rules.
Revising tax benefits for child-care expenses, including a new deduction and tax-favored savings accounts.
Implementing a one-time 10% repatriation tax for multinational corporations.

We will provide more details if and when any of these provisions are enacted into law.

This article was written by a professional financial journalist for Preferred NY Financial Group,LLC and is not intended as legal or investment advice.

An individual retirement account (IRA) allows individuals to direct pretax incom, up to specific annual limits, toward retirements that can grow tax-deferred (no capital gains or dividend income is taxed). Individual taxpayers are allowed to contribute 100% of compensation up to a specified maximum dollar amount to their Tranditional IRA. Contributions to the Tranditional IRA may be tax-deductible depending on the taxpayer's income, tax-filling status and other factors. Taxed must be paid upon withdrawal of any deducted contributions plus earnings and on the earnings from your non-deducted contributions. Prior to age 59%, distributions may be taken for certain reasons without incurring a 10 percent penalty on earnings. None of the information in this document should be considered tax or legal advice. Please consult with your legal or tax advisor for more information concerning your individual situation.

Contributions to a Roth IRA are not tax deductible and these is no mandatory distribution age. All earnings and principal are tax free if rules and regulations are followed. Eligibility for a Roth account depends on income. Principal contributions can be withdrawn any time without penalty (subject to some minimal conditions).