By: Linda T. Cammuso:
President Trump unveiled an ambitious tax cut reform plan soon after his inauguration. As of early March, we have learned that passage within the first one hundred days of his presidency is remote. While the very idea of the tax package is keeping the stock market happy, enactment requires that it go through the congressional budget process and political realities. Projections now indicate that tax reform will be part of the spring 2017 budgetary process with negotiations that could last for months.
We are closely monitoring news about the president’s tax reform, and any regulations that might impact your estate plan, so that we may best counsel you on any needed changes to your current plan.
Briefly, the tax reform plan provisions include:
- Repeal of the so-called Federal “death tax” (the estate tax). The estate tax is a transfer tax on the value of assets in a decedent’s estate. It is imposed at the time of death based on the value of the estate (currently applicable at the Federal level for estates in excess of $5.49 Million). While this is a distinct benefit to many Americans, Massachusetts residents must still contend with our state estate tax, which applies for estates in excess of $1 million. Accordingly, the repeal of the Federal estate tax will only benefit Massachusetts residents with estates in excess of the Federal tax threshold, and only to the extent of the Federal portion of their estate tax liability
- The alternative minimum tax law will be repealed
- The seven individual income tax brackets will be folded into three tax rates of 33 percent, 25 percent and 12 percent
- The corporate income tax rate will drop from 35 percent to 20 percent; the tax rate paid by subchapter S corporations will drop from 39.6 percent to 25 percent
As noted above, we are monitoring the situation and will keep you informed. In the meantime, if you have questions about your estate plan, please feel free to contact Estate Preservation Law Offices at www.estatepreservationlaw.com, or call us at 508 751-5010.