Corporate Income Tax
- Flat tax rate of 21% effective January 1, 2018
- 100% deduction for qualified property through 2022, then phased down over 5 years.
- Interest expense deduction limited to 30% of adjusted taxable income if average receipts are greater than $25 Million
- Alternative minimum tax would be repealed
- The two-year carryback and 20-year carryforward periods would be eliminated, allowing the NOL to be carried forward indefinitely. The NOL deduction would be limited to 80% of the taxable income.
Business Income tax of Sale-Proprietors, S Corporation, & Partnerships
Deduction equal to 20% of their allocable share of business income
Limitations for S-Corp equal to the lesser of:
- 20% of allocable share of business income, or
- 50% of share of the W-2 wages of the S-Corp.
Limitations for Real Estate Partnerships equal to the lesser of:
- 20% of net income, or
- 25% of W-2 wages plus 2.5% of allocable share of the unadjusted basis of the building.
Individual Income Tax
Tax brackets would remain at 7, but the rates would be lower for most brackets including
|Rate||Single||Married filing jointly|
|10%||Up to $9,525||Up to $19,050|
|37%||Over $500K||Over $600K|
Standard deduction increases to $12,000 for individuals, $18,000 for head of household and $24,000 for married couples filing jointly.
Personal exemptions will be eliminated.
State and local Tax deduction can be combined with property taxes to reach and not to exceed a total amount of $10,000.
Mortgage Interest can be deducted on the interest paid on the first $750,000 of mortgage debt for a first and second home. No home line of equity can be deducted.
Medical expenses above 7.5 percent of a taxpayer’s adjusted gross income can be deducted for 2017 and 2018; 10% thereafter.
Charitable Contributions still allowed
Other miscellaneous itemized deductions Eliminated
Student Loan Interest can continue to be deducted up to $2,500.
Alimony for divorce or separation instruments executed after December 31, 2018, will no longer be deductible by the payer, nor will it be includible in income of the payee.