Final Hour Changes to Tax Law

Final Hour Changes to Tax Law

Download Printable Version

As 2017 quickly winds down, I find myself reflecting on the past year and speculating as to what the New Year will bring. Most of us would agree that the past twelve months have certainly been tumultuous. In the beginning of 2017 we saw Donald Trump take his seat as the 45th President of the United States and with that he ushered in a significant shift in American politics. This past year has proven to be a banner year for investors, with the Dow Jones Industrial Average showing gains of about 24% to date. Unfortunately this year we have also seen diplomatic relations between North Korea and the United States degrade to the point where nuclear conflict is possible. Before we get too far in reflecting on the events of 2017, there is still the possibility of significant changes to our tax laws before the years end. It wasn’t so long ago on December 17, 2010 that President Obama signed the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act. This act dramatically changed the estate tax laws to the current iteration we have today.

At present time, both the House of Representatives and Senate have passed different tax bills changing our tax code. Congressional leaders are attempting to merge the terms of the different bills and push a single tax bill through as soon as possible. The timing of the bill is so important because of changes to Congressional membership that will affect the current republican majority. The House bill creates four individual income tax rates ranging from 12% up to 39.6%. The Senate bill has seven individual income tax brackets ranging from 10% up to 38.5%. Both bills are generally in agreement to raise the standard deduction for single filers to about $12,000 and for married filers to about $24,000. The Senate bill repeals the individual health insurance mandate under the Affordable Care Act, while the House bill has no changes to the current mandate. As far as estate tax treatment, the Senate bill doubles the exclusion from current numbers, whereas the House bill also doubles the exclusion but repeals the estate tax after 2024. Both bills aim at cutting the corporate tax rate to around 20%, with the Senate bill tax cuts cut starting in 2019 and the House bill tax cuts starting in 2018. Simply put, revisions and concessions have yet to be finalized, but are likely to be released in the coming hours or days by the House-Senate conference committee working on the bill. Congressional leaders all plan on having a vote no later than December 19.

TrustGuard™

For those of you concerned with the impact of new tax laws on your estate plans, we recommend enrolling in our TrustGuard™ program. TrustGuard™ is comprised of an annual attorney review of the estate plan, continued guidance on trust funding, as well as annual updates due to changes in the law or family circumstances. The TrustGuard™ program is entirely voluntary and is billed at an annual flat rate. If you anticipate making many adjustments to your trust, or if you want to formally review your documents annually, TrustGuard™ is a cost-effective way to keep your trust plan current. We have now entered into the enrollment period for our 2018 TrustGuard™ program. All 2017 TrustGuard™ active participants as well as all JGB clients who created a Trust-based plan in 2017 will receive enrollment/renewal forms in the mail. Feel free to contact our offices for further information on TrustGuard™.

The Attorneys and Staff of JGB thank you for choosing our firm to assist you with your estate planning, estate administration, and business law needs. We look forward to a long and fulfilling practice serving our clients. Most importantly we wish you and your family Happy Holidays and a Happy New Year!

Categories:

Contact Us Today

Work with Attorneys Devoted to Your Best Interests
    • Please enter your name.
    • Please enter your name.
    • Please enter your email address.
      This isn't a valid email address.
    • Please make a selection.
    • Please enter a message.