Republicans in Congress have issued their proposed legislation to change significantly the tax laws that affect all of us. The changes are extensive, and this will probably be the beginning of debates and possible compromises. Or it could result in no changes at all. So the answer to the question what to do right now is probably little or nothing. The aim to have a new tax law signed by yearend is probably more ambitious than realistic. But there's a value in questioning the tax rules: some may have outlived their usefulness, others might be too costly for what they achieve; others might hold back growth in the economy.
The proposal changes income tax rates, increases the standard deduction and eliminates the personal exemption. It repeals the alternative minimum tax, which is one of those taxes that was designed for a specific purpose but that has grown to cover many more people than was intended. There is a lower income tax rate on income earned through certain pass-through entities, like partnerships. The exemption for federal estate tax is doubled, and the tax itself is to be phased out over a 5 year period. Despite the tax disappearing, the step-up in the basis of assets at death will remain in effect. That's an important point, because it means that not only can assets be transferred free of any estate tax, but the growth in value of the assets while the decedent owned them will escape income taxes. There is valuable planning to be done with that change alone.
When tax laws change, whether it's in this form or another, there are winners and losers. Among the winners will be those who look carefully at the changes and make and/or change plans based on the new reality. More to follow as we learn what might and won't happen.