This morning, the U.S. House of Representatives' Committee on Ways and Means introduced the Tax Cuts and Jobs Act of 2017. There will certainly be many negotiations over the provisions in the bill, and we expect changes along the way.
Here are some of the highlights that would be effective beginning January 1, 2018:
Consolidate the seven current individual tax brackets into four at 12%, 25%, 35%, and 39.6%, using the following tax brackets:
Proposed Tax Rates
* A summary of the bill provisions lists the threshold for this bracket at $230,000, but the current text of the bill would leave this bracket at $200,000. At this point, it is unclear which amount is the correct proposed amount.
Increase the standard deduction:
Joint filers: $24,000
Single filers with at least one qualifying child: $18,000
Single filers (and surviving spouse): $12,000
Increase the child tax credit to $1,600, and add a nonrefundable credit of $300 for non-child dependents and a new nonrefundable $300 personal credit;
Eliminate itemized deductions other than mortgage interest deductions, charitable contribution deductions, and property tax deductions of up to $10,000. All other state and local tax deductions are eliminated;
For new home purchases, mortgage interest deductions would be limited to interest on $500,000;
Eliminate the AMT for individuals and corporations;
Lower the corporate tax rate to 20%, and create a 35% maximum rate on passthrough business income; and
Increase the estate tax exemption to $10 million, and repeal the estate tax after six years.