One of the several policy changes that President Trump promised during his campaign was restructuring the federal income tax system. He also promised significant tax cuts and to cap the number of deductions allowed at $200,000 total. President Trump’s proposal calls for reducing income tax rates, from its current seven brackets to just three.
The current 7 tax brackets are:
- 10% – Single: $0- $9,275- Married joint: %0- $18,550
- 15% – Single: $9,275-$37,650- Married joint: $13,250 – $50,400
- 25% – Single: $37,650- $91,150 Married joint: $50,400- $130,150
- 28% – Single: $$91,150- $190,150 Married joint: $130,150- $210,800
- 33% – Single: $190,150- $413,350 Married joint: $210,800- $413,350
- 35% – Single: $413,350-$415,050 Married joint: $413,350- $441,000
- 39.6% – Single: -$415,050 + Married joint filers- $441,000 +
President Trump is proposing 3 brackets:
- 12% percent
- 25% percent
- 33% percent.
See more specifics of Pres. Trump’s tax proposal here.
CNBC spoke with Timothy Speiss, who is the chairman of personal wealth advisors at accounting firm Eisner-Amper. Speiss says for many middle-income taxpayers, the new standard deduction [under Trump’s proposal] may exceed their itemized deductions, thus allowing a higher deduction. See more below.
According toe CNBC-
The Urban-Brookings Tax Policy Center has estimated what people would save annually on their federal taxes by income under President-elect Donald Trump’s tax plan and the tax plan proposed by House Republicans.
According to their figures if you earn $24,000 to $83,000 per year, your savings would be minimal. If you earn between $83k/year and $143K/year, the Trump plan would save about $2,000 while the House proposal would save about a quarter of that (approx. $500) If you earn over $143,000 per year, President Trump’s proposal would save over $15,000, while the GOP proposal would save just over $10,000
Trump’s plan also calls for the repeal of the alternative minimum tax and the estate tax. The proposal also caps itemized deductions at $100,000 for single filers and $200,000 for married couples filing jointly.
The CNBC report also stated:
Not all taxpayers would benefit from Trump’s proposals. His plan calls for repealing personal exemptions for taxpayers and their dependents as well as the head of household filing status. If that happens, single parents with dependent children and most married households with at least three dependents would pay more in federal income taxes. About 20 percent of households and more than half of single parents would pay more in taxes under Trump’s tax plan even with the child-care breaks,
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