Reduce the tax rate to 33% and the number of brackets.
Eliminate the AMT.
Simplify tax benefits for higher education.
Eliminate all itemized deductions except for mortgage interest deduction and charitable contribution deduction.
Repeal estate and generation skipping transfer tax.
Reduce corporate tax rate to 25%.
Repeal the Affordable Health Care Act.
Obviously, nothing is clear other than change is coming. We will have to wait and see what happens in the future.
ADVICE: Keep up with the news to see changes in the tax law. If you subscribe to this blog, you will receive information. Also, be sure to contact your CPA and attorney if changes are made. Any changes will affect your tax planning and your estate planning.
WORD OF THE WEEK: Alternative minimum tax (“AMT”) is an “alternative” tax calculated at the same time as your regular tax. You pay the higher of your regular tax or the AMT. If the AMT applies to you, you may lose many credits or deductions you would normally receive if you didn’t have to pay the AMT.
The AMT was created to keep the wealthiest taxpayers (and corporations) from using loopholes or big deductions to avoid paying a minimum amount of taxes. However, until 2013, the tax has never been indexed for inflation, so as wages increased, the AMT to affect more middle class Americans. The best way to see how close you are to paying the AMT is to look at Form 6251 from your last year’s tax form.
Individuals most likely to pay AMT have income over $100,000 and very large deductions, such as high local, state, or property taxes, major medical bills, high child care credits, second mortgage interest or home equity lines of credits to finance college costs or consolidate debts, or large long term capital gains.
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