CPA Tom Wheelwright Raises 5 Trump Tax Plan Changes To Watch
During the last major tax reform in 1986 under President Ronald Reagan, Wheelwright worked for the National Tax Office at Ernst and Whinney (now Ernst and Young) in Washington D.C., and provides insights on what it will take to pass the Trump Tax Plan.
5 Things to Watch in Proposed 2017 Trump Tax Plan
1. Similar House and Senate Bill Changes Most Likely To Pass - Wheelwright explains that if both houses of Congress agree on items, those changes are most likely to pass. For example, both bills include a 20% corporate tax rate, a pardon for bringing income back to the U.S. by multi-national corporations (rate still pending), a reduction in income tax brackets for individuals and small businesses, deductions for newly purchased equipment, an increase in the estate tax exemption, and elimination of the AMT (Alternative Minimum Tax).
2. Lowest Cost Options Most Likely to Pass - Among the common changes in the House and Senate Bills, the lowest cost options are most likely to pass because[ the Senate cannot add more than $1.5 trillion to the federal deficit over 10 years. Wheelwright emphasizes, "Watch how long the tax reductions are in place or when they begin." For example, the Senate may delay lowering the corporate tax rate for another year to make the numbers work. Wheelwright adds, "Look for the Senate's version of the estate tax to pass, tax rates that have less impact on the budget and the reinstatement of the AMT (Alternative Minimum Tax) at the end of the 6-year budget period."
3. Retroactive Tax Changes: In the House Bill, many of the changes that increase revenue are retroactive to November 2, 2017, which is the day the House first announced its bill. For the Senate Bill, some changes will be retroactive to September 17, 2017, even though most changes will be effective January 1, 2018. Wheelwright adds, "Paying close attention to the effective dates of each provision could result in massive tax savings for those who carefully plan out their tax consequences."
4. Specific Senator Benefits To Get 50 Votes To Pass - As a result of 50 votes needed to pass the Senate Bill, many benefits in the Senate version benefit specific senators to get the votes. Wheelwright emphasizes; "The good news is that while they target specific state constituents, everyone gets to take advantage of these benefits." For example, watch for provisions that impact industries such as real estate, agriculture and alcoholic beverages.
5. Biggest Winners and Losers - The biggest winners by far are Big Business, and the Biggest Losers are high-income employees. The tax law has been a series of incentives, primarily benefiting business owners and investors for a long time. Wheelwright emphasizes, "Make no mistake about the Trump Tax Plan - this is a plan to benefit large corporations and professional investors. Many personal tax benefits may disappear in order to pay for the investor and business tax benefits such as equipment write-offs and real estate depreciation deductions."
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Tom Wheelwright is a CPA, CEO of ProVision (CPA firm in Tempe, Arizona) and Best-Selling Author of Tax-Free Wealth. Wheelwright is a leading wealth and tax expert, global speaker, and Entrepreneur Magazine Contributor. Tom is best known for making taxes fun, easy and understandable, and specializes in helping entrepreneurs and investors build wealth through practical and strategic ways that permanently reduce taxes. As a Rich Dad Advisor to Robert Kiyosaki (Rich Dad Poor Dad), Tom frequently speaks at conferences worldwide to entrepreneurs on these topics. His work has been featured in Forbes, Accounting Today, Investor's Business Daily, Consumer Reports, USA TODAY, FOX & Friends, CBS 5 News Phoenix, ABC News Radio, NPR, and many more media. http://taxfreewealthadvisor.com