Provisions for Individuals, Businesses, and IRS Reforms
On June 24, House Republicans released their latest tax reform proposal, “A Better Way—Our Vision for a Confident America.” Earlier in the year, Tax Reform Tax Force, led by Ways and Means Committee Chairman, Kevin Brady (TX-R), was given the responsibility to deliver a “strategy to create jobs, grow the economy, and raise wages by reducing rates, removing special interest carve-outs, and making our broken tax code simpler and fairer.”
Here are the highlights.
The blue print suggests several IRS reforms including:
Restructuring the agency focused on three major units:
Families and individuals,
Business, and
The creation of a “small claims court independent of IRS. This is designed to resolve routine disputes more quickly.
Changing IRS leadership so that it is headed by an Administrator, appointed by the President with the consent of the Senate for a three-year term
Establishing a mission of “Service First”
Remaining committed to assisting taxpayers
For individuals and families, the blue print would:
“Simplify, flatten and lower tax rates for families and individuals,” reducing top tax rates to 33 percent and number of brackets to three
Reduced progressive tax rates on capital gains, dividends, and interest income
Eliminate the alternative minimum tax
Merge existing family tax benefits into a larger standard deduction including larger child and dependent tax credit
Simplify higher education tax benefits
Maintain the earned income tax credit (EITC) as well as current tax incentives for retirement savings
Current provisions that would be eliminated include alternative minimum tax, (AMT) itemized deductions, excluding mortgage interest deduction and charitable contribution deduction as well as estate and generation-skipping transfer taxes
For businesses, the proposal includes:
Creation of a new business rate for small businesses organized as sole proprietorships or pass-through entities
Reducing the corporate tax rate to 20 percent
Providing for immediate expensing of the cost of business investments
Interest expense deducted against interest income, with net interest expense carried forward as a deduction against net interest income in future years
Net operating losses (NOLs) to be carried forward indefinitely, increased by an interest factor, and eliminating NOL carrybacks
Retaining the research credit
Eliminating unspecified special interest deductions and credits
Shifting to a territorial tax system and a consumption-based tax approach
Providing a 100 percent exemption for dividends from foreign subsidiaries
Simplifying international tax rules
These proposals will be debated in the 2017 session. Maddox Thomson will monitor the proposal’s progress and keep our clients apprised. As always, our team is here to answer any questions you may have. Do not hesitate to call or email us today.
July 14, 2016
House Republicans Tax Reform Proposal
Provisions for Individuals, Businesses, and IRS Reforms
On June 24, House Republicans released their latest tax reform proposal, “A Better Way—Our Vision for a Confident America.” Earlier in the year, Tax Reform Tax Force, led by Ways and Means Committee Chairman, Kevin Brady (TX-R), was given the responsibility to deliver a “strategy to create jobs, grow the economy, and raise wages by reducing rates, removing special interest carve-outs, and making our broken tax code simpler and fairer.”
Here are the highlights.
The blue print suggests several IRS reforms including:
For individuals and families, the blue print would:
For businesses, the proposal includes:
These proposals will be debated in the 2017 session. Maddox Thomson will monitor the proposal’s progress and keep our clients apprised. As always, our team is here to answer any questions you may have. Do not hesitate to call or email us today.
Featured articles
Sunset of the Tax Cuts and Jobs Act of 2018 Estate Tax Implications
ChatGPT vs The Accounting World: A Revolution in Efficiency
Tax Block Changes for 2024
Deferred expansion of 1099K reporting for electronic payments like Venmo or Zelle
Tax Benefits of living in the great state of Texas
Texas Size Property Tax Cut Proposal
Related articles
Texas Size Property Tax Cut Proposal
Maddox, Thomson & Associates Announce Newly Elected Leadership
Citizenship for MTA’s Own Chi Le
2022 Annual Inflation Adjustments for Numerous Tax Provisions
Tax Changes Proposed in President Biden’s American Families Plan
Tax Provisions in the American Rescue Plan Act of 2021 (Part Two)
Tax Provisions in the American Rescue Plan Act of 2021 (Part One)
Important Update: Tax Filing Extension for Texas Residents
President-Elect Joe Biden’s Tax Agenda
Order Up! IRS Issues Final Regulations on the Deduction of Business Meals and Entertainment
Tax Tips for Trying Times
Tax Day 2020 is Fast Approaching … Are You Up to Speed?