House Passes Tax Reform Bill
On November 16, The House approved its tax reform package—the Tax Cuts and Jobs Bill (HR 1). The Senate is working on its own tax reform bill which, if passed, would require reconciliation with the House version before final legislation can be sent to the White House.
As approved by the House, HR 1 would:
—Reduce individual tax rates to a four-tiered structure (12, 25, 35 and 39.6 percent),
—Nearly double the standard deduction and eliminate the deduction for personal exemptions;
—Cut the mortgage interest deduction cap in half;
—Eliminate all state and local tax itemized deductions, except for the first $10,000 of property taxes;
—Eliminate the deduction for medical expenses;
—Eliminate the alimony deduction;
—Increase and modify the child tax credit;
—Double the estate and gift tax exclusion and lower the rate, and repeal the estate tax in 2024;
—Reduce the top corporate tax rate from 35 to 20 percent;
—Create a lower rate for income from certain pass-through tax business entities;
—Increase bonus depreciation to 100-percent for five years;
—Limit the deductibility of business interest;
—Restrict like-kind exchanges to real property;
—Repeal the individual and corporate alternative minimum tax;
—Provide for significant international reforms; and
—Make many other changes to the tax code.
If you have any questions on this topic, please contact your Gettry Marcus advisor.