Trump Tax Reform – Here it Begins.

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. 

 For Businesses:

  • 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.

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