This Issues and Insights provides a summary of the new tax reform act and round-up of important highlights.
- There are still seven individual tax brackets, but the top rate was lowered from 39.6% to 37%.
- As expected, the tax reform act nearly doubles the prior estate, gift, and generation-skipping transfer tax exemption, from $5,490,000 for individuals, or $10,980,000 for married couples, to approximately $11,200,000 for individuals or $22,400,000 for married couples.
- The standard deduction is nearly doubled under the law—from $6,350 to $12,000 for individuals, and from $12,700 to $24,000 for married couples.
On December 22, 2017, President Trump signed into law the highly anticipated tax reform act. Like most tax laws, it is neither positive nor negative in and of itself; rather, its effects will vary according to taxpayers’ individual circumstances. Most of the law’s provisions became effective on January 1, 2018, with numerous provisions expiring after 2025. The bill is quite comprehensive and includes both personal and corporate tax changes. The following summary focuses on the key provisions applicable as they relate to high-net-worth individuals.
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