Tax reform has been in the works behind the scenes for months (and some parts of it for years), but it has now been released to the public and nearly every business and individual taxpayer will be impacted. However, the framework released by Congress was short on details.
This may be the first time in a generation (since 1986) that we will have comprehensive tax changes taking place, yet there are still many uncertainties with tax reform this year, including the specific details of the proposed changes; the effective dates of any changes; the prospects on whether tax reform will be enacted at all, etc.
Highlights of the Proposed Changes
The framework offers the following main themes that will encompass tax reform this year:
- Tax relief for middle-class families
- The simplicity of “postcard” tax filing for the vast majority of Americans
- Tax relief for businesses, especially small businesses
- Ending incentives to ship jobs, capital, and tax revenue overseas
- Broadening the tax base and providing greater fairness for all Americans by closing special interest tax breaks and loophole.
The Administration leaves it to the congressional tax-writing committees to draft the actual tax legislation that adheres to the above themes, but also spells out the details of these changes:
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Some of the individual tax changes included in the framework are as follows:
- Tax Brackets. The individual tax rates will be condensed from the current seven brackets down to three at 12%, 25%, and 35%.
About Jim Brandenburg
Jim Brandenburg is a tax partner with Sikich LLP, a Top 100 CPA firm. Jim has extensive experience and knowledge in corporate and partnership tax law, mergers and acquisitions, and tax legislation. His expertise includes working with owners of closely held businesses to identify tax planning opportunities and assist them in implementing these strategies.