Tax Cuts and Jobs Act: Let's Begin!

At the passage of the bill, one of the Republican Congressmen said to keep 3 dates in mind in Year 2018:
January 1, February 1, 
and April 15.

Well, here we are on the cusp of the 1st day of year 2018.  The highlights are all we've got so far:
(I am writing this post on December, 2017). 

pc: forbes

pc: Forbes

pc: Forbes

• If you are over age 65, blind or disabled, you can tack-on $1,300 to your standard deduction ($1,600 for unmarried taxpayers).

Compare the above tables to the IRS' 2017 tax rates HERE
You can read the above Forbes article in full HERE.

Otherwise, here are a few more of the deets (via wikipedia & the White House) that caught my attention for a variety of reasons:

• Family tax credits. The bill doubles the child tax credit from $1,000 to $2,000, $1,400 of which will be refundable. It also provides a $500 credit for other dependents, versus zero under current law.

• State, local, sales, and property tax deduction. The deduction for state and local income tax, sales tax, and property taxes ("SALT deduction") will be capped at $10,000. This would have more impact on taxpayers with more expensive property, generally those who live in higher-income areas, or people in states with higher state tax rates.

• Education deductions and credits. No changes are made to major education deductions and credits, or to the teacher deduction for unreimbursed classroom expenses, which remains at $250. The bill initially expanded usage of 529 college savings accounts for both K-12 private school tuition and homeschools, but the provision regarding homeschools was overruled by the Senate parliamentarian and removed. The 529 savings accounts for K-12 private school tuition provision was left intact.

• Alimony deduction. Alimony paid to an ex-spouse will no longer be deductible by the payor. However, alimony payments will no longer be included in the recipient's gross income. This effectively shifts the tax burden of alimony from the recipient to the payor. This provision is effective for divorce and separation agreements signed after December 31, 2018.

• Moving expense deduction. Employment-related moving expenses will no longer be deductible.

• Tax preparation expense deduction. Expenses related to preparing and filing your taxes (such as accountants or tax-preparation software) will no longer be deductible.

• Mortgage interest deduction: Mortgage interest deduction for newly purchased homes (and second homes) would be lowered from total loan balances of $1 million under current law to $750,000. Interest from home equity loans (aka second mortgages) will no longer be deductible, unless the money is used for home improvements.

• The corporate tax rate would fall from 35% to 21%, while some related business deductions and credits would either be reduced or eliminated

• The Act contains provisions that would open 1.5 million acres in the Arctic National Wildlife Refuge to oil and gas drilling. This major push to include this provision in the tax bill came from Republican Senator Lisa Murkowski. The move is part of the long-running Arctic Refuge drilling controversy; Republicans had attempted to allow drilling in ANWR almost 50 times (Really?!!!)

• Members of Congress will no longer be able to deduct their living expenses.
• A 21 percent excise tax will be imposed on compensation over $1 million paid to executives at tax-exempt organizations.
• The loophole used to deduct executive compensation over $1 million will be eliminated.

Let the [Tax-cut] adventure begin!

The White House: The Tax Cuts Act

Tax Cuts & Jobs Act of Year 2017


Preliminary Details & Analysis


ANWR

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Summary: Tax Relief per President Trump

“If we want to renew our prosperity, restore our opportunity, and reestablish our economic dominance – which is what we should be doing – then we need tax reform that is pro-growth, pro-jobs, pro-worker, pro-family, and, yes, pro-American.” - POTUS, September 2017

An America First Tax RELIEF PLAN: President Donald J. Trump, the House of Representatives Ways and Means Committee, and the Senate Finance Committee are proposing vital tax relief to strengthen the middle class, grow the economy, and unleash America’s economic comeback.

• We are calling for a dramatic tax cut, which includes:
  • A larger zero tax bracket;
  • Lower tax rates for individuals, providing relief to Middle Class American families;
  • Lower small business tax rates, giving a boost to millions of American businesses and farms; and
  • Lower corporate tax rates, making American business more competitive.
• Tax cuts, like those in President Trump’s unified framework, boost economic growth.
  • Since Vice President Pence’s 2013 tax cuts, as Governor of Indiana, unemployment in Indiana has been cut in half and more than 200,000 jobs have been created.
  • President Reagan’s 1986 corporate income tax cut contributed 3.3 percent to economic growth over ten years, according to the Tax Foundation.

A TAX CUT For WORKING AMERICANS: We are laying out a tax-relief framework that will unburden America’s Middle Class.

• Double the standard deduction so that more income is taxed at zero percent.
  • The first $12,000 of income for an individual and $24,000 for a married couple will be tax-free.
• Consolidate the seven existing tax brackets for taxable income to only three brackets: 12 percent, 25 percent, and 35 percent.
• Increase and expand the Child Tax Credit to benefit more middle-income families and eliminate the marriage penalty.
• Create a new $500 tax credit for those caring for an adult dependent or elderly loved one.

Simplify the tax code: We will simplify tax filing so Americans can file their returns on a single sheet of paper.

• The vast majority of Americans will be able to file their taxes on a single sheet of paper.
  • American individuals and businesses spend more than 6 billion hours complying with the tax code, according to the National Taxpayer Advocate.
• The plan repeals the Alternative Minimum Tax, which requires many taxpayers to do their taxes twice.
• The plan ends the job killing “Death Tax.”

Lower The Crushing Business Tax Rates: We will cut tax rates for American business and make American business competitive again.

• The plan will reduce the corporate tax rate to 20 percent.
  • The United States corporate income tax rate is the highest in the Organisation for Economic Co-operation and Development (OECD), and has been above the OECD average for almost 20 years.
  • The United States corporate income tax rate is more than 10 points higher than China’s, according to the Congressional Budget Office (CBO).
• The plan will also reduce the top tax rate paid by sole proprietors, S corporations, and partnerships to 25 percent.
• For the next five years, American businesses will be able to immediately write off the cost of their equipment and other capital investments.
• Economists agree that America’s corporate tax rate harms America’s workers by keeping their wages down.
  • More than 70 percent of the corporate tax burden falls on American workers, according the CBO.

Bring Wealth Back: We are proposing an “American Model” that will bring back trillions of dollars held overseas and restore America’s competitive edge.

• Profits that have accumulated offshore will be subject to a one-time low tax rate, thereby ending the tax incentive to keep those profits offshore.
• To avoid paying high U.S. corporate taxes on foreign profits, American companies have often reinvested their money abroad instead of repatriating it to U.S. shores.
  • Companies hold an estimated $2.8 trillion in earnings offshore, according to Audit Analytics.
• This plan will stop the “Offshoring Model,” which penalizes companies for incorporating in the United States.

Link
White House Press Release