ABC New Hampshire & Vermont News
Tax Cuts & Jobs Act of 2017 Overview
Not since the Reagan administration has there been a tax overhaul of this proportion. The goal is to cut taxes for both individuals as well as businesses to create jobs and boost the economy. President Donald Trump signed Congress’s new tax plan on December 22nd, the bill is formerly known as the Tax Cuts and Jobs Act.
Here are some key changes brought on by the bill:
With respect to individuals, the bill:
- Replaces the existing tax brackets (10%, 15%, 25%, 28%, 33%, 35%, and 39.6%) with new brackets (10%, 12%, 22%, 24%, 32%, 35%, 37%)
- The standard deduction has increased from $6,350 to $12,000 for individuals and for married couples filing separately, from $9,350 to $18,000 for heads of household, and from $12,700 to $24,000 for married couples filing jointly.
- The child tax credit will increase from $1,000 to $2,000 per child under age 17
For businesses, the bill:
- Reduces the corporate tax rate from a maximum of 35% to a flat 21% rate
- Excludes 20% of income of owners of “pass-through” businesses like partnerships and limited-liability companies
- Doubles the estate tax exemption to $11 million
So far the tax plan overall has been received favorably by the business community; time will tell what the full impact of this law will be. Be sure to read future snapshots to stay updated.