Tax Reform Outlook: Cloudy, With A Chance Of A Law
Published Tuesday, April 18, 2017 at: 7:00 AM EDT
Ever since President Trump entered office, the drums have been beating loudly for a major overhaul of the tax system, echoed by support from a Republican-led Congress. So what are the chances for tax reform legislation this year?
In his early days in office, Trump expressed intentions to cut individual tax rates and consolidate other provisions, implement tax breaks to spur business growth, and repeal the federal estate tax, among other proposals. The House GOP issued a blueprint for tax reform in 2016 that seeks many of the same objectives, although by different means in some cases.
It seems at first blush that there's enough sentiment in Washington to pass a comprehensive bill, but there undoubtedly will be unexpected twists and turns along the way. In April, the Trump administration rolled out a revised tax plan emphasizing tax cuts for individuals and businesses. But the prospects for eventual enactment remain unclear.
If passed, such tax legislation likely would affect many aspects of your financial affairs, including investments, retirement plans, IRAs, estates, and trusts.
What should you do now? With uncertainty in the air, the best idea probably is to stick with your current plans and closely monitor the situation. We will be ready to help you if and when the time comes for action.
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).
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