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It is said, and according to this article, President Trump has proposed the most significant tax cuts since the Reagan administration.
The proposal calls for reducing personal income tax rates from 7 to 3 brackets, at 12%, 25% and 33%. It would increase the standard deduction to $15k, which is currently at a little over $6k for single filers, and $30k for married couples, which is currently a smidge over $12k.
I suggest checking out the graph in the article. It portrays the estimated savings taxpayers would have annually, based on their income. As if the estate tax really applies to the majority of Americans, the plan also calls for its repeal.
At the same time, the plan calls for repealing personal exemptions and for dependents, as well as the head of household filing status. Which would mean that single parents with dependent children and most married households with at least three dependents would pay more in income taxes.
The Plan also caps itemized deductions at $100k for single, and $200k for joint filers.
So, what does the article say to taxpayers who may have to prepare for a possible tax reform?
"Whenever possible, defer any realized gains to down the road because we may have lower tax brackets during the Trump administration," said James Gambaccini, a certified financial planner and managing partner at Acorn Financial Services in Reston, Virginia.
In my opinion, the plan proposes both negative and positive changes. If implemented, it may help a great deal of taxpayers, and possibly, stimulate the economy, at the same time, it may prompt taxpayers to clutch tighter on the purse strings. How would these possible changes affect you?