Tax planning in an election year:
Year-end income-tax planning is tricky enough; this year, with the pending transfer of power in Washington, there’s even more uncertainty. Here’s how President-elect Donald Trump’s plans could figure into your planning strategies.
Year-end income-tax planning often is tricky enough. This year, the uncertainty rises due to the pending power transfer in Washington.
President-elect Donald Trump has vowed a significant revamp of the federal income-tax code for individuals. But the details — even with Republican control of Congress — still aren’t known, especially since the House GOP leadership has its own ideas and Democrats will demand a voice.
“Democrats maintained the ability to filibuster legislation in the Senate, assuring their seat at the table when it comes to drafting new laws,” noted Tim Steffen of Robert W. Baird & Co. in a commentary.
Any changes aren’t likely to be made retroactive, meaning they won’t directly affect your 2016 return to be filed early next year. But they could affect your planning strategies over the waning weeks of this year.
Where we stand now
Trump wants to cut tax rates and make other substantive changes. But Americans will enter the coming tax season with the status quo intact for 2016 returns. That means individual tax rates ranging from 10 percent to 39.6 percent remain in place for filing next April, noted the National Society of Accountants and tax researcher CCH in a recent commentary. The standard deduction will be $6,300 for singles and $12,600 for married couples filing jointly.
This December won’t see the type of year-end legislative adjustments that became common in the past, when Congress made last-minute moves to extend provisions that expired or were set to expire. Legislation in late 2015 ended much of VIRTRA CEO AND FOUNDER