U.S. Republicans have achieved one of their most long-awaited goals: a thorough reform of the tax code. At the same time, they also believe that the measures in the motion are of crucial importance to the Republican support of the majority in both the House and the House during the mid-term elections in November 2018. The motion will sharply cut corporate taxes permanently and temporarily reduce taxes to be paid by wage earners in the United States.
In 2018, a tax rate of 39.6% will affect taxpayers with a single income over $ 426,700 and married taxpayers who jointly claim over $ 4800.50 in revenue, up from the previous $ 418,400 and $ 470,700 respectively. Other tax rates are 10%, 15%, 25%, 28%, 33% and 35%.
How will it affect personal income tax?
The bill will retain seven grades, but reduce one of five grades of tax rates. The new tax rate started at 10% and then rose to 12%, 22%, 34%, 32%, 35% and 37%. FX678 quoted foreign media reports, the highest tax rate of 37% for individuals with annual income of more than 500,000 US dollars. The starting point for the couple to enter the maximum tax rate is 600,000 U.S. dollars. The original rate of this grade is 39.6%. The personal income tax relief will start in 2018 and expire in 2025.
Does the business get a big tax cut?
The answer is yes. The new law will reduce the company tax rate from 35% to 21%.
Not long after the Senate passed the tax reform act, two Senate chiefs changed their minds and wanted to abolish the AMT. Because at the AMT tax rate of 20%, the company can not make a lot of deductible. When the normal tax rate is also 20%, most companies will pay tax on AMT. This may be contrary to the original intention of tax reform. Industry experts suggest that the AMT should be repealed or that the AMT tax rate be lowered accordingly.
In tax year 2017, the tax allowance for married joint declaration and surviving spouse is $ 84,500, and for other unmarried individuals $ 54,300. The Senate program provides only short-term tax relief to individuals that will expire in 2026. The Senate wants to retain the interest deduction ceiling of a $ 1 million loan on home tax credit interest tax deductions, and the House of Representatives hopes to cut back to $ 500,000.
At the international level, the plan will be to use the "territorial tax system" and to relinquish the unique U.S. taxation, irrespective of the country where the corporate profits are earned. But it also includes provisions to levy a global tax on foreign profits of U.S. multinationals at a reduced tax rate to protect the U.S. tax base. The program did not specify the reduced tax rate.
On February 15, both the U.S. House of Representatives and the House of Representatives formed the final version of the tax reform plan and are expected to vote again this week in both houses of the House and the House of Commons. The vote will be submitted to President Trump for signing and will eventually be implemented throughout the United States. The content of the tax reform stipulates that if the enterprise income tax is reduced to 21%, the personal income tax will be reduced to some extent, and the multinational corporations will also get the tax rebate opportunity of profit return (the cash and cash equivalents rate is 15.5% and the non-cash equivalent rate is 8%)
A possible tax advantage for a U.S. company is the transfer tax. U.S. companies can opt for "straight-through" tax by applying to IRS for status as a subsidiary of S-Company. On December 1 local time, the U.S. Senate passed the tax reform bill 51 to 49, which will be the first amendment to the tax law in Congress for 31 years. The bill will reduce the corporate income tax from 35% to 20%, allowing business owners to deduct 20% of their business income.
In 2016, each adult who did not purchase Medicare was subject to a fine of $ 695, a child of $ 347, and a ceiling of $ 2,085 for each family fined. The big price increase in 2017 will make some current Obamacare employees reconsider whether they will renew the plan in 2018 or choose to pay a fine of $ 695 per person or 2.5% of revenue to see which amount Larger.
In 2017, the standard deduction for a single taxpayer was $ 6,350, plus an additional personal allowance of $ 4,050. The joint filing standard deduction was $ 12,700, plus an allowance of $ 8,100. The revised tax code standard deduction for a single declaration of $ 12,000, joint declaration of $ 24,000, the abolition of personal allowances.
Tax reform, which states live "the most loss"?
Limit the $ 10,000 tax credit if you live in a high tax area such as California, New York, Texas, which will allow you to reduce a large percentage of your deductions. The motion will not change the mortgage relief for existing homeowners. But for new homes, taxpayers can cut interest rates on their mortgage loans from $ 1 million to $ 750,000.
Pay medical bills
The government offers tax incentives to encourage people to buy long-term care insurance. Long-term care premiums are qualifying medical expenses and taxpayers can normally deduct medical expenses exceeding 10% (16.5% and above 7.5%) of the adjusted gross income (AGI) by itemized deductions on Form A of the Federal Tax Form 1040, The self-employed person can deduct all the medical expenses pays directly (in case the spouse of the self-employed person can not deduct the long-term care group insurance provided by the employer) at line 29 of the 1040 table, the excess part is included in the table A Deductions.
Estate tax: Cancel!
Before Tax Reform: Individuals with a property of more than $ 5.49 million and a couple of $ 11 million will be subject to 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 tax reform: It is estimated that by 2024 it will be completely abolished. It is estimated that the Trump family will eventually save tens of billions of US dollars of property.