The Tax Cuts and Jobs Act was released today by the House Ways and Means Committee. This is a long way from finalized but here are some key items that were included in the 429-page Bill.
For individuals and families:
- Lowers individual tax rates for low- and middle-income Americans to Zero, 12%, 25%, and 35% but keeps the 39.6% for high-income taxpayers.
- Increases the standard deduction – from $6,350 to $12,000 for individuals and $12,700 to $24,000 for married couples.
- Eliminates Personal Exemptions but will:
- Establish a new Family Credit – which includes expanding the Child Tax Credit from $1,000 to $1,600 and provide a credit of $300 for each parent and non-child dependent to help all families with their everyday expenses.
- Preserving the Child and Dependent Care Tax Credit to help families care for their children and older dependents who may need additional support.
- Keeps the Earned Income Tax Credit to provide important tax relief for low-income Americans.
- Streamlines higher education benefits to help families save for and better afford college tuition and other education expenses.
- Keeps the deduction for charitable contributions so people can continue to donate to their local church, charity, or community organization.
- Changes to the home mortgage interest deduction as follows: Keeps the deduction for existing mortgages and maintains the home mortgage interest deduction for newly purchased homes up to $500,000.
- Limits the itemized deduction for state and local property taxes to $10,000.
- Repeals the Alternative Minimum Tax
- Provides immediate relief from the Death Tax by doubling the exemption and repealing the Death Tax after six years.
- Lowers the corporate tax rate to 20% – down from 35%, which today is the highest in the industrialized world.
- Reduces the tax rate for pass-through businesses to no more than 25%.
- Allows businesses to immediately write off the full cost of new equipment.
- Retains the low-income housing tax credit that encourages businesses to invest in affordable housing.
- Preserves the Research & Development Tax Credit – encouraging our businesses and workers to develop cutting-edge “Made in America” products and services.
- Strengthens accountability rules for tax-exempt organizations to ensure the churches, charities, foundations, and other organizations receiving tax-exempt status are focused on helping people and communities in need.
- Modernizes our international tax system so America’s global businesses will no longer be held back by an outdated “worldwide” tax system that results in double taxation.
- Prevents American jobs, headquarters, and research from moving overseas by eliminating incentives that now reward companies for shifting jobs, profits, and manufacturing plants abroad.