American historyStart with the most ruthless tax reform actFinally the overall situation has been set!
Trump said: This is Christmas gift to all Americans this year!
To be average for every American familyPer yearProvincial tax 1182 US dollars!
Tax reform name:Tax Cuts and Jobs Act
current state:The House version has been adopted, and the Senate version has also been adopted. In the next two versions will be negotiated with each other, come to the final version, to vote, Trump eventually signed.
Estimated implementation time:December 2017 (of which housing loansinterest rateTax relief reform, has been implemented on November 2, details see later)
Sounds really is a good gift, hidden gift is everyone like it? Read together to know!
The latest US tax reform program details
Let's go back! What kind of changes are most important to the Chinese people in their tax reform programs that directly affect our wallets? (The following is the House plan has been adopted, the Senate and the existing change is not large)
1, tax rate: simplified!
Before tax reform:Personal income tax rate from seven: a total of 10%, 15%, 25%, 28%, 33%, 35% and the highest 39.6%.
After the tax reform:Personal income tax is also reduced to four levels: 12%, 25%, 35%, the rich 39.6% tax rate will remain unchanged.
2, personal allowance (Personal Exemption): canceled!
Before tax reform:Each taxpayer has a limit of $ 4050, and taxpayers' wives and family members have the same quota.
After the tax reform:Cancel taxpayers' personal allowance of $ 4050.
Give a chestnut:3 family homeThe couple work together and have a child. With a personal exemption of $ 4,050 per person and a 3-person household of $ 12,150, the same can be done in the same way. If the child's age is less than 17 years old, there will be 1,600 yuan tax relief, but also another count.
Give a chestnut:4 family homeThe couple work together and have two children. With the exception of a personal exemption of $ 4,050 per person and a 4-person household of $ 16,200, extra tax will be required in addition to the extra part ($ 16,200), which will not only increase the tax burden but also upgrade to the next A high tax rate level.
3, the standard deduction (Standard Deduction): double!
Before tax reform:The standard deduction for singles is $ 6,350 and the standard deduction for returns from spouses is $ 12,700
After the tax reform:The standard deduction for single persons is $ 12,000 and the standard deduction for the return of married couples is $ 24,000
After the tax reform, these groups will not have to pay taxes at all:
Single with annual income below $ 12000
Annual income below $ 24000 families
【Before Tax Reform / Current Affairs】Personal income tax payable formula:
Gross income - deduction deduction - personal allowance personal exemption
After tax reformPersonal income tax payable formula:
Taxable income = adjusted gross income-deduction deduction (2 times before)
(US tax knowledge science: each taxpayer has a basic tax-free income beyond this amount began taxation in the United States there are two types of tax-exempt income ① standard deduction ② Deductions: Deduction for high-income people. First, according to the IRS, 2/3 of the U.S. people use the first method.)
4, single resident personal income tax rate: most of the drop!
Single Income Statement:
0 - 9525 US dollars: 10% tax rate will rise to 12%
9525 - 38700 USD: 15% tax rate dropped to 12%
38700-45000 USD: Tax rate 25% down to 12%
45000-93700 US dollars: the tax rate remained unchanged at 25%
93700-195450 USD: Tax rate of 28% down to 25%
195450-200000 dollars: 33% tax rate dropped to 25%
200000-500000 US dollars: 33% tax rate rose to 35%
> 500,000 US dollars or more: tax rate of 39.6% to 35%
5, the common tax return of husband and wife personal income tax rate:Most dropped!
Couples reporting changes:
0-19050 USD: Tax rate increased from 10% to 12%
19050-77400 US dollars: the tax rate of 15% down to 12%
77400-90000 dollars: the tax rate of 25% down to 12%
90000-156150 US dollars: the tax rate remained unchanged at 25%
156150-237950 US dollars: tax rate of 28% down to 25%
237950-260000 dollars: 33% tax rate dropped to 25%
260000-100000 dollars: 33% tax rate rose to 35%
Above $ 1,000,000: The tax rate remains unchanged at 39.6%
After the tax reform: all types of family tax cuts
(Source: Tax Foudation)
Annual income of 30,000, single filing, no child: a tax reduction of $ 188
Annual income of 40,000, family tax, no children: a tax reduction of $ 19
Annual income of 52,200, single filing, 2 children: a tax reduction of $ 895
Annual income of 85,000, family tax, 2 children: a tax reduction of $ 1072
Annual income of 165,000, family tax, 2 children: a tax reduction of $ 1373
Annual income 325,000, family tax, 2 children: a reduction of $ 6410
Annual income of 2 million, family tax, 2 children: a tax reduction of $ 35118
Annual income of 1 million, family tax return, 2 children: tax reduction $ 59130 (personal and corporate merger tax 200,000)
6, child tax credit: up!
Before tax reform:Tax credit for children under 17 years old is $ 1,000
After the tax reform:A tax credit of $ 1,600 for children under the age of 17 is proposed to provide a tax credit of $ 300 per family. (House version, Senate version is a reduction of $ 2000 tax per child)
7, housing loansinterest rateTax credit: drop!
Before tax reform:As long as the interest-bearing loans as long as the individual under the $ 1 million, can enjoy tax relief.
After the tax reform:To enjoy the loan tax limit up to 500,000 US dollars.
(Note: refers to the loan more than 500,000 US dollars, not the price of 500,000, and only for the new loan, not for the existing loans, California started on November 2)
8, state tax / local tax tax relief: canceled!
Before tax reform:State tax / local tax tax relief
After the tax reform:Cancel state tax / local tax deductions
9, reduce tax credit items: cancel most!
Before tax reform:Tax credit a wide range of projects.
After the tax reform:Canceled tax deductions on medical expenses, adoption fees, interest on student loans, etc. Only keep the home loan tax credit, and charity donation tax credit.
10, Alternative Minimum Tax ATM: Cancel!
Before tax reform:In order to avoid excessive tax avoidance, allowable deductions are few, prohibiting personal allowances and state tax relief counterparts.
After the tax reform:Cancel the alternative minimum tax
Alternative Minimum Tax (AMT), an AMT that applies to high-paying taxpayers by setting limits on those benefits, will affect nearly 5 million Americans!
11, inheritance tax: cancel!
Before tax reform:A personal tax of more than 5.49 million U.S. dollars and a couple of 11 million U.S. dollars will be levied a 40% estate tax. Under the new tax reform program, individuals and couples whose properties are under 10.98 million U.S. dollars and 22 million U.S. dollars or less respectively do not have to pay the inheritance tax.
After the tax reform:It is expected that by 2024 it will be completely abolished and it is estimated that the Trump family will eventually save tens of billions of dollars of property.
12, US corporate tax: dropped dramatically!
Before tax reform:The corporate tax rate is currently 35%
After the tax reform:Perpetually cut corporate tax, dropped to 20%
13, overseas corporate tax: a substantial increase!
Before tax reform:U.S. companies must pay a 35% tax on their overseas earnings when they move into the United States.
After the tax reform:Taxes on profits earned by U.S. companies abroad are as follows: a minimum tax of 10%, and a tax rate of 12% on the profit-returning of U.S. companies to cash equivalents. The tax rate on non-liquid investments is set at 5%. Organization to prevent the employment of enterprises, headquarters, research and development flow overseas.
The most tax reform program is what you want?
The pending tax reform has finally come to a conclusion, there must be some people happy to worry about, take a look at the future of Chinese friends purse!
1, who benefits large?
Low-income groups are exempt from tax
Low-wage individuals with annual income below $ 12,000 and low-wage families (husband and wife) with annual income below $ 24,000 are exempt from paying personal income tax. There is no doubt that good news for this income class and for families.
Ordinary middle class with annual income below 100,000
Example:San Francisco median family income $ 88,518 (Department of Numbers data in 2015)
Before tax reform:Belongs to the third tax class, you need to pay 25% of the tax. The deduction of the standard tax deduction for husbands and wives tax deduction standard amount of $ 12,700, minus two individuals for a total of $ 8100 personal relief, the actual payment of $ 10854 tax.
After the tax reform:Belongs to the third tax class, you need to pay 12% of the tax, the deduction of the husband and wife tax standard deduction of $ 24,000, need to pay a tax of $ 7742.16.
So for this group the new proposal dropped by more than 2,000 on the old basis.
Young children family
For families with children, the United States has always given preferential tax policies, the tax reform will be even greater efforts. Families with children under the age of 17 in the future tax relief from $ 1000 to $ 1600, plus an extra 300 knife tax benefits. Is not a small number.
Super-high income families with annual salary of $ 480,050- $ 1,000,000
A joint tax declaration by the husband and wife can provide you with a tax relief for your own family. Take a look at the ultra-high-income families that are at the top of the list, up from the 4.6% (39.6% -35%) you pay less. Tax-saving money can buy a luxury car!
Great impact on most Chinese companies
This policy affects more than just the big companies such as Google's Google, but all the smaller companies. Many Chinese come to the United States to start their own businesses, such as Chinese restaurants, law firms, dental clinics, accounting and so on. Previously, because of the high corporate tax, most Chinese employers would choose not to pay the corporate tax first, but instead would be individually taxed by the head (boss or partner) of the company. And now tax reform, the corporate tax is only 20%, many companies will directly choose to file a tax through the company, because it is more cost-effective.
At the same time, for the small Chinese start-up companies, they were incapacitated to move the company overseas. The high corporate tax put great pressure on their operations. Now that corporate tax has plummeted, they finally have a respite. , Can win more living space.
Some media predict that if the tax reform plan is implemented, it will deduct 6 trillion yuan (trillion) yuan in taxes for U.S. companies, small business owners and individuals in the next decade.
Biggest winner or big rich
Although Trump promised that any reform will focus on the middle class, mainly to reduce the burden on the middle class, in fact the rich benefit the most. Those who benefit most are those rich families who make up 20% of the total household income in the United States and whose annual income is above 480,000 U.S. dollars. Currently the highest personal income tax level unchanged at 39.6%, but the estate tax may be permanently abolished.
In addition, the replacement minimum tax (AMT) will be canceled and Trump is said to have run for the president to ask him to pay his tax return. When the president opened the tax form, he paid 25% of the tax last year, while 23% of the 25% is the alternative minimum tax, either because of an alternative minimum tax, which Trump may pay Less. So this should be one of Trump's most annoying items, and it is also expected that the elimination of the minimum tax for substitution will work. From multiple terms, rich families are the biggest beneficiaries.
2, who suffer?
High-priced areas to buy a house family
The group that originally benefited from the mortgage interest tax deduction policy was the high-income families who bought large houses (expensive houses) and paid high mortgage interest rates. The Chinese are an important part of this group. In the United States, the Chinese mainly gather in cities such as the San Francisco Bay Area, Los Angeles and New York. Hundreds or millions of small houses are bought in most places. The tax reform program stipulates that loans exceed 50 Million knife can not enjoy the tax relief, which is a big hit for the Chinese families buy high-income loans!
such as:Annual income of 50,000 US dollars
Before tax reform:The annual home loan interest paid is $ 5,000, so the state only receives $ 45,000 in income tax
After the tax reform:If the loan exceeds 500,000, then mortgage interest will not be used as a deduction for income tax.
National mortgage loans over 500,000 US dollars geographical map
More than 500,000 US dollars of home equity loans are mainly located in California, New York, Virginia, New Jersey, Texas, Illinois, Maryland, Washington and Florida. As can be seen from the figure, the proportion of Chinese-populated Bega-Jiawan District, Los Angeles and Nancy in Southern California is over 20%. California accounted for 45.7% of the country, of which the Chinese contribution is not small.
Mortgage interest tax impact on California Figure: the greater the impact of the greater the color
However, relative to California, the most sad should be in New York. In the big states, "high prices, high taxes," the New York State; "high real estate taxes, but not high prices," the Texas; "high prices, but not high room tax" is California. Therefore, New York lost the most. In general, the American big city houseworm to cry halo!
High paying singleton & bay double yards
At first glance, personal and spouse income taxes are almost always lower or flat than before, but a column is particularly dazzling. In the tax reform plan personal income of $ 200,000- $ 424.950 and husband and wife income of $ 260,000- $ 424,950 these two ranges not only did not reduce the income tax rate, but increased.
Talking heart and heart, the Bay Area double code farmers families have escaped this circle, a Chinese friend Tucao, that the annual tax reform will not be so heart-hearted, it seems that after the trickle of blood.
Coupled with mortgage interest tax credit to such a greater pressure on family loans, loan credit limit dropped to 500,000, the repayment pressure significantly larger, in order to be able to afford the mortgage, they may choose to buy a smaller house .
Phd with a scholarship
Many international students sharpen their brains to apply for a US study. Apart from their strong education in the United States, another important reason for this is the attractive scholarship offered by the U.S. schools. Many doctors support the doctoral program on a monthly basis. ten years. And now the only economic support to be weakened by the tax reform, the new tax reform policy made it clear that the doctors no longer enjoy the tax relief!
Before tax reform:Taxes and fees paid by doctoral students in the United States are calculated on the basis of their working income. Tuition and fees deducted are not included in the calculation.
New tax reform: Relief tuition fees will also be taxed as part of income.
Give a chestnut:
An unmarried doctor, a year has 30,000 knife income and 30,000 knife tuition relief.
Before tax reform:The annual income is calculated at 30,000, with only 12% of the tax, minus the standard deduction of $ 12,000, and only a tax of $ 2160.
After the tax reform:Annual income is calculated at 60,000, 25% tax is required, even if the standard deduction increased to $ 24000, you need to pay a tax of $ 9000.
Trump's new tax reform, the doctor a year to pay an extra nearly 7000 tax, which for income is not high, "poor students" is undoubtedly a fatal blow, plus a lot of school International Students' tuition remissions and fees are well above $ 30,000 a year, meaning that most Chinese students will pay more taxes than the figures above.
Do not know the income gap, how much enthusiasm will dampen research enthusiasts?
Big family of 5 or more
The new tax reform will eliminate the personal allowance of $ 4,050, which is a huge loss to families with a population of more than 5, especially in low and middle income families, with a 3% reduction in personal income tax rate of income Tax relief, for such families will not be tax cuts, but tax increases.
3, no effect on who does not itch
High-income middle class
In 2015, The Pew Charitable Trusts defined a middle-class family as a household whose income was 67% -200% of the state's median income. Take the median household income in San Francisco as an example. The annual income of 160,000 belongs to high-income middle-class families.
Before tax reform:Remove the standard deduction of 12,000,28% of the tax rate, minus 8,100 individual deductions, the final deduction 33,340
After the tax reform:Remove the standard deduction of 24,000, 25% of the tax rate, the final deduction of 3,4000
For this group, the amount of tax credit, it is simply a drop in the bucket, into what kind of matter are irrelevant.
Tax reform out, the United States fried!
This afternoon, the tax reform concerns the "wealthy" of every family. At the moment it was released, the entire United States is not calm!
how about you? At the moment how the mood, tax reform, you have to pay the tax is increased, or reduced?
Do you like this Christmas gift from Trump?