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Tax Cuts and Jobs Act – Differences between the House and Senate Proposals

Posted by Traci A. Malik Posted on Nov 15 2017

The House and Senate recently released their proposals for the Tax Cuts and Jobs Act to overhaul the American tax system with hopes to pass legislation before 2017 year end. In both proposals the standard deduction is doubled, individual tax rates are lowered across the board, and corporate tax rates are cut to 20%.   Outline below are some of the differences between the proposals:

 

House Proposal:

Individual Tax Rates    12%, 25%, 35% 39.6%

 

Itemized Deduction

            State and Local tax capped at $10,000

            Mortgage interest limited to $500,000 mortgage- one principal home only

            Medical expense deductions repealed

 

Child tax credit    $1,600

Corporate tax rate   20% effective 2018

Estate tax:  Increase to $10 Million 2018 with repeal after six years (2024)

 

Senate Proposal:

Individual Tax Rates    10%, 12%, 22.5%, 25%, 32.5%, 35%, 38.5%

 

Itemized Deduction

            Eliminates State and Local tax

Mortgage interest for acquisition debt up to $1 Million, eliminates deduction for                home equity debt

            Medical preserves the existing medical expense deduction

 

Child tax credit    $1,650

Corporate tax rate   20% delayed until 2019

Estate tax:  Doubles the estate tax exemption with no repeal

 

It is apparent that legislators are looking for tax overhaul before year end.  At Jones & Company CPAs P.A., we will be closely following the legislation.  Please contact our office if there are any questions on these proposals at 727.845.4166.

 

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