On December 22, 2017, President Trump signed into law H.R.1.
INCOMPLETE SUMMARY1 :
Individual Tax Implications
• The number of tax brackets remains the same at seven, but the rates applicable to each bracket are: 10%, 12%, 22%, 24%, 32%, 35%, and 37% (as opposed to 10%, 15%, 25%, 28%, 33%, 35%, and 39.6% under current law). • The standard deduction is increased to $24,000 (married filing jointly), $18,000 (head-of-household), and $12,000 (single). These amounts represent an increase over current law, which provides for a standard deduction of $12,700 (married filing jointly), $9,350 (head-of-household) and $6,350 (single). • Gives non-corporate taxpayers a deduction from gross income equal to 20% of domestic “qualified business income” ("QBI") from a partnership, S corporation, sole proprietorship, estate, or trust. The deduction reduces the maximum tax rate on such income to 29.6%. The deduction is also available for ordinary dividends from a real estate investment trust (“REIT”) and qualified income earned through a publicly traded partnership (e.g., a master limited partnership or “MLP”). For income earned from a partnership, S corporation, sole proprietorship, estate, or trust the deduction equals 20% of the QBI amounts for each qualified trade or business carried on by the taxpayer.
Permanently reduces the general corporate tax rate from a maximum graduated rate of 35% to a flat 21% for taxable years beginning after December 31, 2017. The Bill also eliminates the corporate alternative minimum tax.
1.The above paragraph is an incomplete summary of the new law: HR1. Individuals and Businesses should consult with a Tax Attorney for a complete summary and advice as it pertains to the new law and their tax situation; However, at the time of this disclosure, the individual tax brackets ARE NOT permanent and revert back to 2017 brackets in 2026. Consult with your Financial Advisor regarding how to use the Temporary individual tax savings going forward. The Law is effective: January 1st, 2018.
The full name of the new law is: