The Internal Revenue Service will open the 2016 tax filing season on January 23, 2017. The deadline for filing federal individual income tax returns is April 18, 2017 due to April 15 falling on a Saturday and April 17th being Emancipation Day. falling on. The IRS encourages taxpayers to e-file as it is the best way to ensure accurate tax returns and get faster refunds.
Mr. Trump proposes to cut the existing 7 different tax brackets to 3 with 12%, 25%, and 33% tax rates.Elimination of the Net Investment Income Tax and Alternative Minimum Tax
The Net Investment Income Tax and Alternative Minimum Tax may be eliminated in the coming years if the new adminstration can convince congress to accept their tax plan.Elimination of the Personal Exemption
The personal exemption, which is $4,050 per person for the 2016 tax year, may be eliminated for all taxpayers under the proposed tax plan.Increased Standard Deductions
Mr. Trump proposes an increase in the standard deduction to $15,000 for single filers and $30,000 for those filing a joint return; a significant difference from the current standard deduction of $6,300 and $12,600 for each respective filing status. subsequent years,Cap on Itemized Deductions
Under the proposed tax plan, itemized deductions will no longer be phased out based on adjusted gross income (AGI); rather, the deductions will be limited to $100,000 for single filers and $200,000 for those filing a joint return with no regard to AGIChild and Elderly Care Deduction
The new tax plan proposes a Child and Dependent Care Deduction for the care expenses of children under the age of 13 and elderly dependents. The deduction is capped at the average cost of child care in the taxpayer’s state of residence; for elderly care, the deduction is capped at $5,000 per year. The deduction will be available in conjunction with the current Child and Dependent Care Credit. Child care spending rebates equal to 7.65% of child care expenses not already claimed for the proposed deduction or credit will be available to taxpayers with earnings that do not exceed $31,200 ($62,400 if filing jointly) for the tax year.