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The Trump Tax Reform Outline and What You Should Be Asking

September 30, 2017 | Amin Dabit, CFP®

The Dow, S&P, and Nasdaq all closed at all-time highs to end the quarter, with the Dow having 8 straight quarters of positive returns. Crude oil futures were up after weekly oil rig counts rose and the markets have reacted positively to the new GOP tax plan this week. Global stock markets have also gained as economic growth around the world has been solid.

Weekly Returns:
S&P 500: 2,519.36 (+.69%)
FTSE All-World ex-US: (+.20%)
US 10 Year Treasury Yield: 2.25% (.00%)
Gold: $1,280 (-1.3%)
EUR/USD: $1.181 (-1.7%)

Major Events:

  • Monday – GE Agrees to Sell Industrial Unit to ABB for $2.6 Billion
  • Tuesday – Case Shiller Index releases Top 20 city Composite which posted a 5.8% year over year gain.
  • Wednesday – Trump Administration releases broad outline for Tax reform
  • Thursday – Roku IPO Shares Surge in trading debut
  • Friday – Elon Musk announces Hypersonic Space Rocket Airline

Our Takeaway:

The Trump administration released the tax reform outline. While the summary does answer some anticipated questions it’s still short on some details. Some of the items that it does deliver on include; AMT (Alternative Minimum Tax) Repeal, fewer tax Brackets, increased standard deductions, and the “death tax” repeal. Initial findings by the Tax Policy Center states that this package would add a $2.4 trillion hole in the federal budget but other estimates anticipate it to be closer to $1.5 trillion. Much of the proposed tax plan has yet to be finalized including income tax brackets, any changes to capital gains as well as the healthcare tax. It’s still too early to know what the final reform will look like if or when it actually passes. As always, you’re best served to focus on what you can do for 2017 taxes as what is what we can control. Here are a few items to think about as we kick off the 4th quarter:

  1. Are you on track to max out your 401k or employer sponsored plan?
  2. Any IRA contributions that can be taken advantage of?
  3. Tax-deductible HSA accounts?
  4. 529 plans with state specific tax deductions?
  5. Tax loss harvesting opportunities?

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