Last updated on October 19th, 2020

On Wednesday, September 27, 2017, President Donald Trump proposed tax cuts that will affect both individuals and businesses. If passed, these tax cuts will make up the most drastic changes the United States tax code has seen in a long time.

Here’s what taxpayers need to know.

This tax plan is designed to fulfill President Trump’s promise to lower taxes, provide better jobs and implement higher wages.

President Trump stated, “This is a revolutionary change, and the biggest winners will be the everyday American workers as jobs start pouring into our country, companies start competing for American labor, and wages start going up at levels that you haven’t seen in many years.”

For individual taxpayers, the plan will take the tax brackets down from seven to just three; with tax rates being 12%, 25% and 35%.

The new tax plan also looks to simplify taxes for the middle class. The standard deduction is said to double, going up to $12,000 for individual taxpayers and $24,000 for married couples who file joint returns. This could eliminate the need to itemize in order to claim certain deductions or credits.

Also, the child tax credit is said to increase, though the amount has not been announced. Additionally, a new tax credit for non-child dependents will be created.

For businesses, the tax plan will reduce the corporate tax rate from 35% to 20%. Also, a new tax rate will be created specifically for businesses including sole proprietors and partnerships, benefiting many small and mid-sized businesses.

But, the new tax plan has not been approved yet. While lawmakers have been in talks about how to fix the tax code with both sides applauding the new tax reform, some are concerned about the long-term financial effects of the tax reform. Unfortunately, a cost estimate for the plan has not been approved yet.

President Trump’s proposed tax plan has been all over the news lately. And while it hasn’t been approved so far, it seems like it could greatly benefit the tax-paying community.