PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

Tax Conference Report of the “Tax Cuts and Jobs Act” is Now Live

By at 15 December, 2017, 7:46 pm

What’s are the details of “Tax Cuts and Jobs Act” conference report? We have linked to all the publicly available information below.

The text of the Tax Conference Report is now live on the Rules Committee website:

Courtesy of the U.S. House Whip team:

H.R. 1 — Tax Cuts and Jobs Act [Conf. Rept.] (Ways & Means)

A vote on H.R. 1 is expected to be on the House Floor as early as Tuesday.

Summary: Conference Report to Accompany H.R. 1 – Tax Cuts and Jobs Act

On December 15th the House/Senate Conference Committee for H.R. 1, the Tax Cuts and Jobs Act reached agreement and reported final legislative text. H.R. 1 provides the first comprehensive reform of the tax code since 1986. The legislation lowers rates for both individuals and businesses and eliminates loopholes and complex deductions and credits to simplify the code and encourage job creation and economic growth. With this bill, a family of four earning the median family income of $73,000 will receive a tax cut of $2,059. Specifically, H.R. 1 provisions include:

Individuals:

● Lowers individual tax rates to 10%, 12%, 22%, 24%, 32%, 35% and 37%

● Roughly doubles the Standard Deduction – from $6,350 to $12,000 for individuals and $12,700 to $24,000 for married couples

● Establishes a new Family Credit – which includes expanding the Child Tax Credit from $1,000 to $2,000 for each child and providing new credits of $500 each for other dependents. The credit is refundable up to $1400 provided a social security number is provided for each qualifying child

● Preserves the Adoption Tax Credit

● Preserves the deduction for charitable contributions

● Preserves the deduction for medical expenses and temporarily lowers threshold to 7.5% of AGI from 10% of AGI

● Preserves the home mortgage interest deduction for existing mortgages and maintains the home mortgage interest deduction for newly purchased homes for interest on up to $750,000 of mortgage principal

● Continues to allow people to write off the cost of state and local taxes up to $10,000 for both property and income (or sales) taxes

● AMT thresholds increased to $1 million for married couples and $500,000 for individuals

● Eliminates the Obamacare individual mandate penalty beginning January 1, 2019

● Provides immediate relief from the Death Tax by doubling the exemption amount

● Provides support for Graduate students by continuing to reduce the value of reduced tuition from taxes

Business:

● Lowers the corporate tax rate from 35% to 21%, effective 1/1/18

● Provides a deduction of 20 percent of qualified pass-through income

Includes both a capital test and/or a wage test to broaden the scope of businesses eligible for pass-through deduction

● Establishes safeguards to distinguish between individual wage income and “pass through” business income

● Allows businesses to immediately write off the full cost of purchases of new or used equipment

● Protects the ability of small businesses and any businesses with “floor plan” inventory financing to write off the interest on loans

● Retains the tax-preferred status of private-activity bonds

● Modernizes our international tax system by moving to a “territorial” system

● Returns income trapped overseas through “deemed” repatriation

● Includes “base-erosion” rules to prevent companies from hiding U.S. profits in offshore affiliates

 

Additional Provisions:

● Establishes an environmentally responsible oil and gas program in the non-wilderness 1002 Area of the Arctic National Wildlife Refuge (ANWR).

Additional Resources:

● Joint Explanatory Statement: here

● Senate Finance Committee portal for all tax-related docs: https://www.finance.senate.gov/taxreform

Senate timing: The Senate will vote on the Tax Cuts and Jobs Act conference report after it is received from the House next week. There will be up to 10 hours of debate, followed by a vote on final passage.

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