Nov 29, 201601:12 PMOpen Mic
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Making sense of taxes under President Trump
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Now that we know Donald Trump will be our country’s next president, and the House and Senate both have Republican majorities, you may wonder what that means for your taxes.
We’ve put together some information about how you might see your taxes change, possibly as early as the 2017 tax year. U.S. taxpayers are likely to see changes to their tax brackets, tax rates, and deductions.
Tax bracket and rate changes
The most notable of President-Elect Trump’s proposals would change tax brackets and tax rates, including lowering the top tax rate by 6.6%. He also proposes simplification of the tax brackets, creating just three brackets as follows:
- 12% rate for married joint filers earning under $75,000.
- 25% rate for married joint filers earning $75,000 to $225,000.
- 33% rate for married joint filers earning $225,000 and up.
Brackets for single filers will be half these amounts
Currently, there are seven tax brackets, with marginal rates ranging from 10% to 39.6%. An overview of the current tax rate schedules can be found here.
The plan presented during President-Elect Trump’s campaign, which is still available to view on his website, also calls for changes to the deductions that taxpayers are allowed to take. The proposal includes raising the standard deduction to $30,000 for married filers (from $12,600) and $15,000 for single filers (from $6,300), and elimination of all personal deductions.
For taxpayers using itemized deductions, President-Elect Trump proposes a cap of $200,000 for married joint filers or $100,000 for single filers.
Other proposed changes
There are also a handful of other significant changes that President-Elect Trump proposes in his tax plan, including:
- Lower the business tax rate from 35% to 15%.
- Elimination of the head of household filing status.
- Elimination of alternative minimum tax (AMT) for individuals and businesses.
- Repeal of the 3.8% net investment income tax.
- Elimination of estate taxes.
- Addition of deductions for childcare and eldercare expenses for taxpayers earning less than $500,000 if married or less than $250,000 if single.