This week, the accounting world is abuzz with news of the Trump administration’s proposed tax plan. 415 Group Manager Todd Ruggles, CPA, shares his insight into the framework:
“It’s interesting to see some of the major tax cuts outlined in this plan. But right now, what’s still unclear is how those cuts would be paid for. It’s important to note that it’s still extremely early in this process — what’s proposed here will almost certainly undergo changes, as it makes its way through Congress. So, it’s too soon to say how these proposed cuts will truly end up impacting businesses and individuals. At 415 Group, we’ll stay on top of these changes, so we can keep our clients informed along the way.”
The Trump administration released on Wednesday a draft of its proposed tax reform to the public, outlining several key items that could significantly impact taxpayers, if it becomes law. These changes would not only impact businesses but individual taxpayers as well. In its current form, the proposed tax plan would:
In order to accommodate these tax cuts, Congress will need to discuss many other offsetting provisions. Possible options include eliminating certain itemized deductions (such as state and local taxes), deemed repatriation of overseas funds, and the domestic production activities deduction.
Although these changes provide many differences from the current structure, it is still early in the process. The plan will undergo many rounds of negotiations before the final bill could be passed by Congress and signed by President Trump to become law. Consequently, any one of these items could be different in its final form. There is also some uncertainty as to when these changes would go into effect, but some have suggested these may not be retroactive as some prior laws have been. Nevertheless, your advisors at 415 Group will closely monitor the situation and continue to alert you to any resulting developments. We’ll provide the insights you and your business need to adapt to these potential changes.