Key points from Trump's tax plan: What would it mean for your finances?

His plan would have major implications for families and businesses.

The Trump administration has revealed details of its plan to make sweeping changes to the U.S. tax system.

Treasury Secretary Steve Mnuchin and National Economic Director Gary Cohn held a briefing at the White House to reveal a tax outline that could have major implications for every American citizen and business.

"The basic premise here is to simplify the tax system, lower rates and make it easy for people," Cohn said, "we don't want to penalize people." GoMN has taken a look at some of the key points.

New tax brackets

The U.S. currently has seven federal tax brackets, ranging from 10 percent for the lowest earners to 39.8 percent for the highest.

This would be replaced by just three tax brackets, 10 percent, 25 percent and 35 percent. Crucially, what haven't been revealed are the earnings brackets determining how much tax you'd pay under the new system. That will come out as discussions head to Congress.

Nonetheless, it represents a 4.8 percent federal tax cut for the nation's highest earners, and will probably mean tax cuts for those in the 15 percent ($9,328-$37,950 single, $18,651-$75,900 filing jointly) and 28 percent ($91,901-$191,650 single, $153,101-$233,350 jointly) tax brackets as well.

Standard deduction doubles for married couples

If you're married and filing your taxes jointly, you can currently deduct the first $12,700 you earn together from your taxes. This would almost double under President Donald Trump's plan to $24,000.

This would take any couples earning less than $24,000 out of tax altogether, although it's essentially a tax cut for everyone filing jointly.

It's not clear at this stage whether the doubled standard deduction will also apply to single people.

Most itemized deductions scrapped

For anyone who itemizes their tax deductions rather than just taking the standard deduction, this would be reduced to just two – mortgage interest and charitable donations.

It means you'd no longer be able to deduct state or local taxes from your federal tax returns, which according to Bloomberg would particularly hit high earners in high-tax states (like Minnesota).

Other itemized deductions include moving expenses, property tax and real estate tax.

However, Trump's outline doesn't clarify whether people could still claim deductions on medical expenses, educational expenses and student loan interest, among others.

The Tax Foundation says around one-third of Americans itemize their deductions, and it's usually the wealthiest earners who do this, as they have the most to gain from itemizing because they pay more in state taxes, take out larger mortgages, and donate more to charity.

Business rates cut

The top corporate tax rate for American businesses is currently 35 percent. Trump wants to introduce a flat corporate tax rate of just 15 percent for all businesses.

Currently, business taxes range from 15 to 35 percent depending on a company's earnings.

This would be a significant tax cut for businesses, though coupled with the scrapping of the alternative minimum tax (more on this next), it could cost the U.S. $2.4 trillion in revenue in its first decade, CNN Money reports.

End to alternative minimum tax and 'death' taxes

Estate tax, referred to as the "death tax" during the White House briefing, will be scrapped under the Trump plan, with Cohn saying no business owner or farmer should have to go through complicated estate planning to ensure their children don't get hit with a massive tax bill when they die.

"No-one wants to see their children have to sell the family business," Cohn said.

The president also wants to scrap the alternative minimum tax (AMT), which was introduced 1969 as a way to prevent the nation’s wealthiest from legally using deductions, tax shelters and other tax breaks to pay next to nothing in federal income taxes.

It basically means your tax obligations are calculated twice, and if at the end of the calculation your AMT is higher than what you’d pay in regular income tax, you pay the 26-28 percent AMT tax rate instead.

President Trump himself paid $38 million in taxes on an income of $150 million in 2005 thanks to the AMT. If the AMT wasn't in place, he would have been able to use deductions and other tax breaks to reduce his tax bill to just $7 million.

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