Interpreting the GOP Tax Reform Plan -- Part 3

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We discussed the various business provisions of the Tax Cuts and Jobs Act released by the House Ways and Means committee in Parts 1 and 2 of this series on the Trump Administrations proposals for tax reform.

In this third article of my five-part series, we will elaborate on the individual tax provisions, including tax credits and reduction of the tax brackets to four from seven.


The current seven tax brackets would be consolidated and simplified into four brackets: 12 percent, 25 percent, 35 percent, and 39.6 percent, in addition to an effective fifth bracket at zero percent in the form of the enhanced standard deduction.

  • For married taxpayers filing jointly, the 25 percent bracket threshold would be $90,000, the 35 percent bracket threshold would be $260,000, and the 39.6 percent bracket threshold would be $1 million.
  • For unmarried individuals and married individuals filing separately, the bracket thresholds would be half the thresholds for married taxpayers filing jointly, except that the 35 percent bracket threshold for unmarried individuals would be $200,000.
  • For single parents filing as head of a household, the bracket thresholds would be the midpoint between the thresholds for unmarried individuals and married taxpayers filing jointly, except that the 39.6 percent bracket threshold for heads of household would be $500,000.

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About Craig W. Smalley, EA

Craig Smalley

Craig W. Smalley, MST, EA, has been in practice since 1994. He has been admitted to practice before the IRS as an enrolled agent and has a master's in taxation. He is well-versed in US tax law and US Tax Court cases. He specializes in taxation, entity structuring and restructuring, corporations, partnerships, and individual taxation, as well as representation before the IRS regarding negotiations, audits, and appeals. In his many years of practice, he has been exposed to a variety of businesses and has an excellent knowledge of most industries. He is the CEO and co-founder of CWSEAPA PLLC and Tax Crisis Center LLC; both business have locations in Florida, Delaware, and Nevada. Craig is the current Google small business accounting advisor for the Google Small Business Community. He is a contributor to AccountingWEB and Accounting Today, and has had 12 books published on various topics in taxation. His articles have also been featured in the Chicago Tribune, New York Times, Yahoo Finance, Nasdaq, and several other newspapers, periodicals, and magazines. He has been interviewed and been a featured guest on many radio shows and podcasts. Finally, he is the co-host of Tax Avoidance is Legal, which is a nationally broadcast weekly Internet radio show.


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