global Tax Senate Passes Bill for Tax Reform...What’s Next? December 07, 2017 The Senate Finance Committee passed a tax reform bill last week. Now, they will have to reconcile the differences between their bill and the House’s Tax Cuts and Jobs Act...what are some potential changes? The Senate passed their tax reform bill last week, making sweeping changes to the tax code. The House has also released a new tax bill, the Tax Cuts and Jobs Act. Now it’s up to the Senate and House to reconcile the differences between the two bills. Here are some important points within the two bills for individuals. While the specifics of these proposals will change after debate begins and differing amendments are incorporated into the legislation, we wanted you to be aware of the potential changes. By no means is this an exhaustive list of what may change in the coming year; be sure to read up on all the proposed changes here. Potential changes to Individual Tax Brackets *Note that Senate changes have been passed. Now it’s up to both Senate and House to reconcile differences between the two plans. House Individuals Married Couples Tax Bracket $45,000 $90,000 12% $200,000 $260,000 25% $200,000 $1,000,000 35% greater than $500,000 Greater than 1 million 39.6% SenateIndividuals Married Couples Tax Bracket $9,525 $19,050 10% $38,700 $77,400 12% $70,000 $140,000 22% $160,000 $320,000 24% $200,000 $400,000 32% $500,000 $1,000,000 35% Greater than $500,000 Greater than $1,000,000 38.5% Potential changes to Business Tax Rates House Corporate tax rate reduced from 35% to 20%. Senate Corporate tax rate reduced from 35% to 20%, but with a delay until 2019. Other potential changes The Senate has approved..... Allowing pass through companies a 17.4% deduction on domestic qualified business income. Increasing the family credit to $500 Repealing the state and local tax deduction for itemized deductions. The House has proposed.... Full repeal of the estate and gift tax Elimination of deductions for casualty losses, medical expenses, tax preparation fees, state and local income taxes and others. Both the House and Senate have proposed.... Eliminating moving expense deductions Eliminating employee unreimbursed business deductions Raising the standard deduction from $6,350 to $12,000 for individuals and from $12,700 to $24,000 for married couples. Eliminating personal exemptions. What’s next? After debate begins, and differing amendments are incorporated into the legislation, the specifics of these proposals will change quickly. Even though the Senate has passed their bill already, before any bill goes to Trump, lawmakers will have to resolve differences between the Senate bill and one the House passed last month, a process that could begin Monday. While legislation is still pending, we will keep you updated on the latest developments. Contact a member of our Tax Services Team for more guidance on the plans.
