If you’re like me, you probably spent your Thursday night pouring over the new Republican tax plan . . . right? At 429 pages, you’d be crazy not to take the chance to read some good ol’ fashioned tax law. I for one really enjoyed the pictures they included around page 275.
Ok Ok . . . you got me. I watched my Spurs get beat up by the Warriors on TV until switching over to the delightful new crime drama, “S.W.A.T.” on CBS. I sometimes like to think of myself like the Shemar Moore of Estate Planning Attorneys, but I digress.
Here are the things you need to know about the GOP tax plan thanks to a wonderful summary from Caitlin Owens on AXIOS:
- the 39.6% tax rate for couples with over 1 million in income remains the same
- the tax plan caps the mortgage interest deduction for newly purchased homes at $500,000 (down from $1 million)
- the plan also allows only $10,000 of property tax to be deducted
- the plan increases the standard deduction from $6,350 to $12,000 for individuals and $12,700 to $24,000 for married couples.
Worried about individual tax brackets? Here they are:
- Individual tax rate brackets:
- 25 percent rate starting at $90,000 for married couples, $45,000 for individuals (everyone below that pays a 12 percent rate).
- 35 percent rate starting at $260,000 for married couples, $200,000 for individuals.
- 39.6 percent rate starting at $1 million for married couples, $500,000 for individuals.
Of not for those expecting or soon to be expecting:
- The plan expands the Child Tax Credit from $1,000 to $1,600 and provides a credit of $300 for each parent and non-child dependent.
- Makes no changes to deductions for charitable contributions.
Have student debt? Might want to read up on this next part:
- The plan eliminates student loan and medical expense deductions and the adoption tax credit.
Haven’t contributed to your 401(k)? Shame! It’s ok, almost two-thirds (2/3) of Americans haven’t either. Start NOW!
- The plan doesn’t change contribution rules for 401(k)s.
Now to the juicy part for Estate Planners:
- The new plan doubles the estate tax exemption immediately (11 million per person) and repeals the tax in six years. Goodbye credit shelter trusts.
Feeling bold? Read the whole text of the Bill here.
As a caveat, none of this is set in stone, so expect major changes to these provisions in the next few months.
If you have questions about the plan and how the proposed changes might affect you and your family, give us a call at the Weaver Firm. 817.638.9016