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On Wednesday (9/27/17) the President along with the so-called Big Six (other top Republican leaders) revealed their framework for an upcoming proposal on tax reforms. While we have more facts than the general statements we have been hearing over the last few months, the plan is still short on details.

Our primary concern here at Bridgeworth is how this might affect our clients, and for right now, it’s just too early to tell.

At the individual level, there is the overall goal to simplify things by taking such steps as eliminating the Estate Tax and Alternative Minimum Tax, consolidating the tax brackets down to three (from the current seven), and roughly doubling the standard deduction while eliminating personal exemptions and most itemized deductions (but retaining home mortgage interest and charitable contributions deductions). In general, any simplification of the tax code can be seen as a positive but any and all of the above could have different effects depending on an individual’s fact pattern and the ultimate details that are passed.

Specifically to investment accounts, the new proposal makes no mention of what would be done to the capital gains and dividends rates.

For our business owners, the proposal looks to cap the corporate tax rate at 20%. For those that derive business income from small business conducted as sole proprietorships, partnerships or S corps, the plan proposes to limit the tax rate to a maximum of 25%.

So, what now?

This is really just the beginning of the complicated political process (think sausage being made) to determine any ultimate changes to the tax code. The major events will be the balanced budget that the House and Senate produce and then the tax committees that flush out the actual details to make sure the proposed changes reconcile with those longer-term figures.

While there isn’t enough information at this time to lead to any clear path of action, stay tuned and we will let you know when we have more details. As always, we recommend consulting with your CPA or tax preparer before you take any tax actions and to involve your Bridgeworth professional in those discussions.

The opinions expressed are as of October 3, 2017, and may change as subsequent conditions vary.
Bridgeworth, LLC does not provide tax or legal advice.
Bridgeworth, LLC is a registered investment advisor.


Bridgeworth is now a part of Savant Wealth Management as of 11/30/2023. Savant Wealth Management (“Savant”) is an SEC registered investment adviser headquartered in Rockford, Illinois.