The Senate Passed the Tax Bill and This is What We Know

trump_tax_bill

The Senate Passed the Tax Bill and This is What We Know

As of the wee hours of the morning last Saturday, the Senate just passed tax reform. While we are all still anxiously waiting to see what will end up on President Trumps desk, let’s review some of the information that we have up to this point.

1. It’s all “temporary”

Under the bill that was just passed, all changes, with the exception of the corporate tax rate, are set to expire on December 31, 2025. At that point in time, (almost) everything will revert back to their current forms. Now, you may think that this is just kicking the can down the road, however it was necessary to comply with the Byrd Rule, which is how the legislation passed with only 51 votes.

2. The bracket changes

Our current income tax system utilizes seven brackets, however the House bill which was passed had only four brackets proposed. However, this is marred with the Senate bill reverting back to seven brackets again. Needless to say, no one is quite sure how many brackets there will be, and we probably won’t know until the reconciled bill hits President Trump‘s desk.

What we do know are the possibilities for the proposed tax rates for each of the plans.

Here is what they are for individuals:

Income Level | Current Rate | House Rate | Senate Rate |
$0 – $9,525 10% 12% 10%
$9,525 – $38,700 15% 12% 12%
$38,700-$45,000 25% 12% 22.5%
$45,000-$60,000 25% 25% 22.5%
$60,000 – $93,700 25% 25% 25%
$93,700-$170,000 28% 25% 25%
$170,000-$195,450 28% 25% 32.5%
$195,450 – $200,000 33% 25% 32.5%
$200,000 – $424,950 33% 35% 35%
$424,950-$426,700 35% 35% 35%
$426,700 – $500,000 39.6% 35% 35%
> $500,000 39.6% 39.6% 38.5%

And here is what they are for married filing jointly:

Income Level | Current Rate | House Rate | Senate Rate |
$0 – $19,050 10% 12% 10%
$19,050-$77,400 15% 12% 12%
$77,400-$90,000 25% 12% 22.5%
$90,000 – $120,000 25% 25% 22.5%
$120,000 – $156,150 25% 25% 25%
$156,150-$237,950 28% 25% 25%
$237,950-$260,000 33% 25% 25%
$260,000-$290,000 33% 35% 25%
$290,000 – $390,000 33% 35% 32.5%
$390,000 – $424,950 33% 35% 35%
$424,950-$480,050 35% 35% 35%
$480,050-$1,000,000 39.6% 35% 35%
> $1,000,000 39.6% 39.6% 38.5%

While these are subject to change, we can safely assume that our ending rates will be somewhere in these ranges.

3. Hello Standard Deduction…

Currently the standard deduction sits at $6,350 for single taxpayers and $12,700 for married taxpayers. Under both the House and the Senate bills the standard deduction is raised to $12,000 for single taxpayers and $24,000 if married.

These changes allow for more simplicity for taxpayers and preparers since 90% of taxpayers will most likely be claiming these deductions.

4. …Goodbye Itemized Deductions

With the standard deductions increasing, it was only foreseeable to see many of the popular itemized deductions going away. While we don’t have the full list of what will stay, the following deductions are most likely going to be eliminated:

• State and Local income taxes • Personal casualty losses (except for federal declared disaster areas) • Unreimbursed employee expenses • Tax preparation fees • Moving expenses

5. Other features

• Corporate tax rate down from 35%-20% (this is permanent) • Estate tax exemption amount is increased

 

We hope you found this article about “The Senate Passed the Tax Bill and This is What We Know” helpful.  If you have questions or need expert tax or family office advice that’s refreshingly objective (we never sell investments), please contact us or visit our Family office page  or our website at www.GROCO.com.  Unfortunately, we no longer give advice to other tax professionals gratis.

To receive our free newsletter, contact us here.

Subscribe to our YouTube Channel for more updates.

Alan Olsen, CPA

Alan Olsen, is the Host of the American Dreams Show and the Managing Partner of GROCO.com.  GROCO is a premier family office and tax advisory firm located in the San Francisco Bay area serving clients all over the world.

Alan L. Olsen, CPA, Wikipedia Bio

 

 

GROCO.com is a proud sponsor of The American Dreams Show.

 

American-Dreams-Show-Accounting-firm-in-ca-cpa-tax-advisors-groco-alan-olsen

The American Dreams show was the brainchild of Alan Olsen, CPA, MBA. It was originally created to fill a specific need; often inexperienced entrepreneurs lacked basic information about raising capital and how to successfully start a business.

Alan sincerely wanted to respond to the many requests from aspiring entrepreneurs asking for the information and introductions they needed. But he had to find a way to help in which his venture capital clients and friends would not mind.

The American Dreams show became the solution, first as a radio show and now with YouTube videos as well. Always respectful of interview guest’s time, he’s able to give access to individuals information and inspiration previously inaccessible to the first-time entrepreneurs who need it most.

They can listen to venture capitalists and successful business people explain first-hand, how they got to where they are, how to start a company, how to overcome challenges, how they see the future evolving, opportunities, work-life balance and so much more..

American Dreams discusses many topics from some of the world’s most successful individuals about their secrets to life’s success. Topics from guest have included:

Creating purpose in life / Building a foundation for their life / Solving problems / Finding fulfillment through philanthropy and service / Becoming self-reliant / Enhancing effective leadership / Balancing family and work…

Untitled_Artwork copy 4

MyPaths.com (Also sponsored by GROCO) provides free access to content and world-class entrepreneurs, influencers and thought leaders’ personal success stories. To help you find your path in life to true, sustainable success & happiness.  It’s mission statement:

In an increasingly complex and difficult world, we hope to help you find your personal path in life and build a strong foundation by learning how others found success and happiness. True and sustainable success and happiness are different for each one of us but possible, often despite significant challenges.

Our mission at MyPaths.com is to provide resources and firsthand accounts of how others found their paths in life, so you can do the same.

Posted in
Building Conscious Communities with Brett Kaufman

Building Amazing Conscious Communities with Brett Kaufman

Introduction: In this interview, Alan Olsen, CPA and featured guest Brett Kaufman discuss Building Conscious Communities and much more. This Transcript of Alan and Brett’s discussion of conscious community building has been generated by software and may have inaccuracies: Alan Olsen So Brett in our segments here in American Dreams, we talked about pathways of life and things…

5 reasons to attend free venture capital seminar 2 of 6

Unveiling the Venture Vision: 12 Insights from the Frontline Capital

Insights Into Venture Capital Investing From Seminar 1 of 6 (To register for seminar 2 of 6 FREE, click here.) “In an era where financial landscapes are constantly being reshaped, it’s crucial for investors to stay ahead of the curve. The Venture Vision Webinar, a joint initiative by GROCO and Impact Venture Capital, recently hosted…

Heroes and Horses veteran care

Heroes and Horses: Brave Challenge to Veteran Care Status Quo

Introduction: In this interview, Alan Olsen, CPA and featured guest Micah Fink discuss how Horses and Heroes use horses to aid veteran care and much more. Transcript: Alan Olsen Welcome to American Dreams. My guest today is Micah Fink, CEO and founder of Heroes and Horses. Micah, welcome to today’s show. Micah Fink Alan, thank…

Balancing IPOs, Ledgers & Fatherhood, A Moment with Travis Combs

Balancing IPOs, Ledgers & Fatherhood, A Moment with Travis Combs

Introduction: Two dad’s discussing life balance in the hectic world of IPOs with featured guest, Travis Combs, Managing Director at the Effectus Group. In this interview, Alan Olsen, CPA, MBA and Travis address family, faith, career, client’s best interest, and trying to strike a balance. Transcript: Alan Olsen Welcome to American Dreams. My guest today is…