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Trump Tax Reform Calculator

The Trump tax reform proposal as proposed by the GOP House Ways and Means Committee on November 2, 2017. These changes are proposed for the 2018 tax year.

Although there is much more detail yet to be released, some of the highlights of the Trump tax proposal are as follows. Reduce the number of 2018 tax brackets from seven down to four; namely 12%, 25%, 35%, and 39.6%. Small business owners who are setup as S-Corporations or Limited Liability companies and receive pass-through income via a K-1 or form 1065, will see their top rate reduced from a high of 39.6% down to 25% on earnings distributions. Other features will be to double the standard deduction to $12,200 for single filers and $24,400 for married filing jointly, eliminate the marriage penalty, and the Alternative Minimum Tax (AMT). The child tax credit is to increase from $1,000 to $1,600 per child although personal exemptions will disappear. A new family tax credit of $300/individual will be introduced to cover you and your spouse, children over 17 whom you're supporting, and for ailing elderly mother or an adult child with a disability. For those who itemize, the state and local property tax deductions will be limited to $10,000. For active/non-passive small business owners, only 30% of distributions will be considered “business” income and, hence, eligible for the new 25% rate. The remaining 70% of distributions will continue to be taxed at your personal rate. You can read more about just how much this will affect your tax liability.

Use this tax calculator tool to help estimate your potential 2018 tax liability under the new plan. Once you run this calculator then you can run the current 2017 tax calculator to see if you will be paying more or less under the new plan. We will continually refine the calculator as more information becomes available.

Income and Tax Information

This information may help you analyze your financial needs. It is based on information and assumptions provided by you regarding your goals, expectations and financial situation. The calculations do not infer that the company assumes any fiduciary duties. The calculations provided should not be construed as financial, legal or tax advice. In addition, such information should not be relied upon as the only source of information. This information is supplied from sources we believe to be reliable but we cannot guarantee its accuracy. Hypothetical illustrations may provide historical or current performance information. Past performance does not guarantee nor indicate future results.