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UHY LLP Michigan Practice
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After the most significant election in our nation's history, the votes are in and Republican nominee, Donald Trump has been elected to become the 45th president of the United States. President-elect Trump's tax plan looks to reduce taxes across the board, including making the business tax rate more competitive and creating new opportunities to grow our economy. Before any proposed changes can be made, they must be approved by Congress. See below to see how Trump's plan compares to our current system.
BUSINESS TAX
| 2016 | Donald Trump | | Corporate Tax Rates | Top rate of 35% | Top rate of 15% | | Alternative Minimum Tax | Applies to corporations | Eliminated | | Pass-through Entities | Income taxed as ordinary income on individual tax return | Option to elect a flat tax of 15% on pass-through income | | Capital Investments | Capitalized and depreciated | Option to expense or capitalize;
If expensing, interest costs are non-deductible | | Unrepatriated Earnings | Not taxed until brought back into US | One time tax of 10% of total unrepatriated earnings | | Childcare Deductions | Employer-provided day care credit capped at $150,000 | Employer provided day care credit capped at $500,000; Additional deduction for employer contributions to employee childcare costs | | Corporate Tax Deductions/Credits | Includes Research and Development credit, Domestic Production Activities Deduction, etc | Eliminate except for Research and Development | | Inversion Transactions | Foreign firms owned 80% or more by US shareholders are considered US firms for tax purposes | No specific proposal |
INDIVIDUAL TAX
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2016
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Donald Trump
| | Ordinary Income Rates | 7 brackets with top rate of 39.6% | Single
12% $0-37,500
25% $37,500-112,500
33% over $112,500
Married
12% $0-75,000
25% $75,000-225,000
33% over $225,000
**Head of Household status is eliminated
| | Standard Deduction | $6,300 (single)
$12,600 married)
$9,300 (Head of Household) | $15,000 (single)
$30, 000 (married)
Head of Household eliminated | | Personal Exemption | $4,050 | Eliminated and included in the standard deduction | | Itemized Deduction | Phase out begins:
$259,400 (single)
$311,300 (married) | Total itemized deductions capped at:
$100,000 (single)
$200,000 (married) | | Like-kind Exchanges | Accrued under federal law | No specific proposal | | Net Investment Income Tax | 3.8% on AGI above:
$200,000 (single)
$250,000 (married) | Eliminated | | Alternative Minimum Tax | AGI above:
$200,000 (single)
$250,000 (married)
Trusts with income over $12,400 | Eliminated | | Capital Gains/Dividends Rates | Maximum rate of 20% with one year holding period | No change | | Child/Dependent Care Expenses | Child/Dependent Care Credit limited for AGI over $43,000 | Above the line deductions for children under age 13 and for care for elderly dependent;
Dependent Care Savings Accounts (DCSA)- deductible $2,000 contribution every year | | Carried Interest | Taxed at rates on capital gains | Taxed as ordinary income | | Estate Tax | Exclusion of $5.45 million adjusted for inflation, top rate of 40% | Eliminated,
Except for estates over $10 million which will be subject to capital gains tax | | Gift Tax | Lifetime exclusion of $5.45 million adjusted for inflation;
Annual exclusion of $14,000 per donee | Eliminated | | Retirement Savings Contributions | No limit on lifetime contributions | No specific proposal |
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Published by UHY LLP News.
Copyright � 2016 UHY LLP. All rights reserved.
Our firm provides the information in this newsletter as tax information and general business or economic information or analysis for educational purposes, and none of the information contained herein is intended to serve as a solicitation of any service or product. This information does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisors. Before making any decision or taking any action, you should consult a professional advisor who has been provided with all pertinent facts relevant to your particular situation. Tax articles in this newsletter are not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided "as is," with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.
UHY Advisors, Inc. provides tax and business consulting services through wholly owned subsidiary entities that operate under the name of "UHY Advisors." UHY Advisors, Inc. and its subsidiary entities are not licensed CPA firms. UHY LLP is a licensed independent CPA firm that performs attest services in an alternative practice structure with UHY Advisors, Inc. and its subsidiary entities. UHY Advisors, Inc. and UHY LLP are U.S. members of Urbach Hacker Young International Limited, a UK company, and form part of the international UHY network of legally independent accounting and consulting firms. "UHY" is the brand name for the UHY international network. Any services described herein are provided by UHY Advisors and/or UHY LLP (as the case may be) and not by UHY or any other member firm of UHY. Neither UHY nor any member of UHY has any liability for services provided by other members.
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TRUMP'S 'HUGE' TAX PLANS