As the election draws nearer, more details of the candidates' economic plans are being unveiled. With this we can start to get a better idea of what our tax future may look like. Unfortunately, the majority of the proposed changes from each candidate are based on taxable income and are different for every situation. Below are the basics in no particular order.
Hillary Clinton's plan would keep the majority of the current standards the same. Ordinary income tax brackets are a great example, all would stay the same with the exception of an addition of a 43.6 percent bracket for high income earners (income over $5 million). Itemized deductions would be limited to 28 percent of income and alternative minimum tax (AMT) would increase. Clinton also wants to reduce the estate tax exemption to $3.5 million and increase the tax rate to 45%.
Donald Trump's plan is quite a bit different. The number of ordinary income tax brackets would be reduced from seven to only three, with the new maximum tax bracket decreasing from 39.6 percent to 33 percent. Obamacare, AMT and the estate tax would all be eliminated; deduction phase outs would begin sooner than they do now and the corporate tax rate would be lowered to 15 percent.
Overall, income taxes would increase with Clinton and decrease with Trump. However, these are just their proposed plans and any changes at all would have to go through quite a process before we see them on our tax returns.
Click here to see your tax picture under each candidate.