Donald Trump won the U.S. presidency due in large part to his promise to lower income taxes for individuals and corporations.

Since Trump will work with a Republican-led Congress next year, there is a good chance that a tax reform bill will be passed. Those changes to the tax code could affect how much you and your business pay in taxes for 2017.

It remains to be seen how Trump’s tax plan might change and how much of it will be adopted by Congress. Below are details of what the incoming president billed as the “Middle Class Tax Relief and Simplification Act” during his 2016 campaign:

Individual Taxes

Trump has pledged to simplify the tax code for individuals, reducing it from seven different income brackets to three. Here is how it would break down:

• Taxpayers with a household income of up to $75,300 (or up to $37,650 for an individual) would see a tax rate reduction from 15% to 12%.
• Taxpayers with a household include of as much as $231,450 ($190,150 for an individual) would see their rate decline from 28% to 25%.
• Taxpayers with household income above $231,450 ($190,150 for an individual) would pay 33%--down from 35% or 39.6%.

Under Trump’s plan, the standard deduction would increase—from $6,350 to $15,000 for single individuals and from $12,700 to $30,000 for married couples. Trump proposes eliminating the Alternative Minimum Tax (AMT), which is a supplemental tax for individuals, corporations or trusts that qualify for a lower standard income tax. Trump would also shed a 3.8% net investment tax on passive income, including capital gains.

Business Taxes

Trump’s plan calls for slashing the corporate tax rate from 35% to 15%, as well as eliminating the AMT for businesses. Small business owners might also be able to avoid paying the 33% individual income tax by putting their assets into “pass-through” entities like sole proprietorships, partnerships or S corporations. Under the president-elect’s proposal, pass-through entities would be taxed at a flat 15% rate.

Trump has also proposed expanding the Section 179 expensing deduction that is used by many small businesses. The annual cap on Section 179 would increase from $500,000 to $1 million.

Materials for the Trump campaign have also indicated that many business tax incentives would be eliminated in exchange for the lower income tax rate. The research and development tax credit, however, would stay in place. Manufacturing companies would also be allowed to deduct any new investments into their businesses.

Last-Minute Provisions

As you conduct your year-end 2016 tax planning, pay close attention to Congress. The outgoing Congress—or the 115th Congress that takes power in January—may approve last-minute provisions that affect individual or corporate taxes. Energy and energy efficiency tax credits, as well as the mortgage insurance deduction, are set to expire at the end of 2016 if Congress does not vote to extend them.

Sources: Forbes, MarksNelsonCPA.com