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November 17, 2016

What to Expect from Trump's Tax Plan

Hi There!,

During his presidential campaign, tax reduction was a centerpiece of Donald Trump’s economic plan.  Now that the GOP is in control of both the House of Representatives and the Senate, President-elect Trump will have fewer barriers to moving his plans forward.  Thus, as the 45th President of the United States, Trump is expected to bring change to tax laws for both business and individuals.  During his campaign, Trump proposed the following changes to current tax law.

Taxation of Businesses

  • Corporate Income Tax
    • Lower the maximum corporate tax rate from 35% to 15%.
    • Repeal the corporate alternative minimum tax.
  • Small Businesses
    • Allow individuals who own pass-through entities to be taxed at a flat rate of 15% on their pass-through income retained within the business.
  • Business Tax Incentives
    • Increase the cap on Section 179 expenses from $500,000 to $1 million.
    • Increase the annual cap on the business tax credit for on-site child care to $500,000.
    • Permit manufacturing firms to immediately deduct capital investments instead of deducting interest expense.
  • International
    • Impose a 10% deemed repatriation tax on accumulated profits of foreign subsidiaries of U.S. entities.

Taxation of Individuals

  • Individual Income Tax
    • Collapse the current seven tax brackets for ordinary income into three brackets of 12%, 25% and 33%.
    • Increase the standard deduction to $15,000 for single individuals and $30,000 for married couples filing jointly. This is an increase from $6,350 and $12,700 permitted in 2017 under current law. 
    • Cap itemized deductions at $100,000 for single filers and $200,000 for married couples filing jointly.
    • Eliminate all personal exemptions.
    • Eliminate the head of household filing status.
  • Capital Gains and Dividends
    • Maintain the current rate structure for capital gains and qualified dividends.
    • Repeal the 3.8% net investment income tax imposed on passive income.
  • Estate and Gift Tax
    • Repeal the federal estate and gift taxes.
  • Alternative Minimum Tax
    • Eliminate the alternative minimum tax (AMT).
  • Childcare Tax Benefits
    • Create a new, above-the-line deduction for child and dependent care expenses.
    • Offer child care spending rebates equal to 7.65% of remaining eligible child care expenses to lower-income taxpayers through the existing Earning Income Tax Credit.
    • Create a Dependent CARE Savings Accounts that would be matched by a government contribution.
  • Carried Interests
    • Tax carried interests as ordinary income.

Taxes Related to Healthcare

  • Repeal the Affordable Care Act (although his campaign materials only mention repealing the 3.8% net investment income tax).

We will continue to keep you informed as President-elect Trump's tax plan takes shape.





Carrie Koshkin, JD

Twitter: @MooreStephensDM

With nearly 15 years of experience in international tax law, Carrie’s international tax services background includes implementing tax-efficient organizations and helping clients enter new jurisdictions. Additionally, she focuses on inbound/outbound tax issues, U.S. tax implications of international restructuring, and more. Contact her at or +1 (713) 860-0219.

New Tax Return Due Dates

The 2017 tax filing season will involve new due dates. The new federal due dates apply to 2016 tax returns and the 2017 filing season and beyond. However, the new rules apply to tax years beginning after December 31, 2015, so they will apply to short-year returns beginning in 2016, before the general 2017 filing season.

Click here for a chart of Original and Extended Tax Return Due Dates.

Changes to the ITIN Program: What You Should Know

By Jeff McCann, CPA

In order to file a US tax return you generally must have a Social Security Number. However, there may be instances in which an individual has a US filing requirement but is not eligible to receive a Social Security Number. In these instances an individual must apply for an Individual Taxpayer Identification Number (ITIN) with the Internal Revenue Service.

The ITIN can be applied for using Form W-7, Application for IRS Individual Taxpayer Identification Number. The taxpayer must provide a copy of his tax return and original proof of identity (a passport would be the most common document) with the ITIN application. When an individual is unable or unwilling to mail an original identification, a copy of the identification can be provided to the IRS when certified by the issuing agency. Alternatives to mailing the application and identification include locating an acceptance agent or personally appearing at a Taxpayer Assistance Center (TAC).

Historically, once an ITIN was issued it could be used by a taxpayer indefinitely.  In December 2015 Congress enacted the PATH (Protecting Americans from Tax Hikes) Act.  Among the items covered in this Act was a provision requiring individuals who were issued ITINs prior to 2013 to renew their ITINs on a staggered schedule between 2017 and 2020. Additionally, the Act provides that an ITIN will expire if it is not used to file a tax return for three consecutive years. The Act intends that by 2020 all applications will have to be filed in person by applicants.

To prepare taxpayers for these changes the IRS released Notice 2016-48 outlining procedures related to ITINs.

Current ITIN Holders: How to Be Prepared for These Changes

Beginning January 1, 2017, ITINs containing the middle digits 78 or 79 will expire. If you are not filing a return for the 2016 tax year, there is no action required by you at this time. However, if you have a 2016 filing requirement and your ITIN contains the middle digits of 78 or 79, or if your spouse and dependents hold an ITIN containing the middle digits 78 or 79, you will need to renew your ITINs in order to file your 2016 tax return.

The IRS began processing renewals on October 1, 2016.  If the ITIN expiration provisions apply to you or any of your dependents, our recommendation is to prepare your 2016 US tax filing and also submit applications for new ITINs for all family members in the same instance in order to prevent contending with the renewal process more than one time.

The IRS has confirmed that it will accept a renewal application from each family member on a return when at least one person has an ITIN that is expiring.

If you have questions please contact MSDM!

Throughout his career, Jeff McCann has served as a consultant for many international clients. From expatriate payroll compliance and program processes, to social security and totalization agreements, through in-depth technical expertise in expatriate and alien taxation, Jeff has experience doing it all. With a diverse background in international affairs, he has helped clients with individual tax planning strategies in home and host locations, executive compensation plans and foreign assignment cost minimization planning. Contact him at or +1 (248) 244-3065.


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