Catalyst U.S. Tax Update: Trump's U.S. Tax Reform Proposal

President Trump outlined the GOP (Republican)/Trump’s US Tax Reform framework, at a brief speech in Indiana. Our U.S. Tax Team has outlined the highlights of the GOP wish-list:

Individual Taxes

  1. 1. Reduce individual income tax rates, from 7 brackets to 3, taxed at 12%, 25% and 35%. The current highest rate of 39.6% is proposed to drop to 35%.

  2. 2. Increase standard deduction to $24,000 (married filing jointly) and to $12,000 (single). This increases the number of individuals taxed at "zero" rate.

  3. 3. Increased child tax credit, currently $1,000 per child under 17, to a higher dollar amount (to be determined by lawmakers). 

  4. 4. Provide a non-refundable credit of $500 for non-child dependents.

  5. 5. Eliminate tax breaks (included here is the elimination of State and Local tax deduction; elimination of personal exemption worth about $4,050 per person; other “preferential items”).

  6. 6. Repeal the Alternative Minimum Tax (AMT).

  7. 7. Repeal the U.S. Estate (“Death”) Tax . Note: this one will be of interest to any Canadians with U.S. situated assets.

Business Taxes

"...keep jobs in America...bring jobs to America..."

  1. 1. Cut corporate tax rate to 20% (from present 35% top rate).

  2. 2. Drop tax rates on pass-through (i.e. entities that are ignored for tax; rather, profits are taxed in hands of owners; for example, S-corporations); the proposed top tax rate would be 25%, down from current 39.6%.

  3. 3. Multinationals can repatriate overseas profits at a low one-time rate of 10%, lower than the current rate of 35%.

  4. 4. Expensing of new investments in depreciable assets made after September 27, 2017 for at least 5 years.

  5. 5. Limited net interest expense deduction incurred by corporations.

It remains to be seen in the next few months if and how the U.S. Congress and Senate will be able to put in place legislation, and how the final version compares to the framework. Catalyst’s U.S. tax team will be monitoring legislative activities please stay tuned for further information.

If this information raises any immediate questions or concerns in regards to your own situation, please contact one of our U.S. Tax professionals and we’d be happy to discuss with you further.  

Larry Flores, CPA, CGA
Senior Manager - U.S. Tax
Phone: 403-767-1511
E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.
Marissa Enage, EA
Senior Manager - U.S. Tax
Phone: 403-750-7686
E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

About Catalyst

Catalyst is a mid-sized independent firm located in Calgary, Alberta that provides assurance and accounting, tax, wealth and corporate advisory services. With over 40 years experience, we specialize in serving owner-managed, mid-market businesses and deal extensively on the design and implementation of business growth and succession strategies. Our professionals take a personal approach to client service, from helping with growing or shrinking, buying or selling businesses, and delivering innovative and customized strategies.

Deep Client Relationships. Expertise. Exceptional Service.

mission 03We are a professional firm of business advisors, accountants and support staff dedicated to helping our clients accomplish their business and financial goals. We succeed through the efforts of firm members responding to the specific needs of each client and the broader communities in which we live.