Here is an interesting article from Forbes briefly summarizing Trump's proposed tax plan. Here is another summary posted on Trump's campaign website.
If you are a small business owner who uses a partnership/LLC taxed as a partnership/S corp, grab your ankles ASAP since pass through status would go away (although kudos if your biz involves massive cap ex investments since depreciation may now be taken 100% at the time of the expense; touch your toes again if your business isn't manufacturing or doesn't hold real estate improvements). Passive investments through those same entities would also be subject to double taxation going forward. Similar treatment coming on capital gains taxes if you make six figures but aren't in the 1% club.
Good news though if you previously made over $250k (no Obamacare tax) and incredible news if you make $415k+ (top rate collapses from 39.6% to 33%). Similarly, if you own a business that previously filed as a C corp (usually larger companies), your rate plummets from 35% to 15% although you will lose many non-depreciation deductions.
Great news, especially for low earners without a ton of kids (personal exemptions would no longer exist) as the standard deduction would spring from $6,300 for single filers/$12,600 for married couples to $15,000 for single filers/$30,000 for married couples. Instead of personal exemptions, child care tax deductions will be available and capped at the average cost in that state.
As with every tax plan, there would be some winners and some losers.
Thoughts?
If you are a small business owner who uses a partnership/LLC taxed as a partnership/S corp, grab your ankles ASAP since pass through status would go away (although kudos if your biz involves massive cap ex investments since depreciation may now be taken 100% at the time of the expense; touch your toes again if your business isn't manufacturing or doesn't hold real estate improvements). Passive investments through those same entities would also be subject to double taxation going forward. Similar treatment coming on capital gains taxes if you make six figures but aren't in the 1% club.
Good news though if you previously made over $250k (no Obamacare tax) and incredible news if you make $415k+ (top rate collapses from 39.6% to 33%). Similarly, if you own a business that previously filed as a C corp (usually larger companies), your rate plummets from 35% to 15% although you will lose many non-depreciation deductions.
Great news, especially for low earners without a ton of kids (personal exemptions would no longer exist) as the standard deduction would spring from $6,300 for single filers/$12,600 for married couples to $15,000 for single filers/$30,000 for married couples. Instead of personal exemptions, child care tax deductions will be available and capped at the average cost in that state.
As with every tax plan, there would be some winners and some losers.
Thoughts?
Comment