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While the bill hasn't been finalized or signed into law, we wanted to give you quick highlights.
Tax Rates: The bracket structure will likely be adjusted to reduce the overall rates paid on taxable income.
Personal Exemptions: The $4,050/dependent deduction may go away. So for a family of four, that means $16,200 in lost deductions.
Standard Deduction: The standard deduction will see a near doubling, which should help non-itemizing taxpayers decrease their taxable income and corresponding overall tax.
State & Local Income Tax Deduction (SALT): The bill looks as though it will eliminate this SALT deduction, which would mostly impact high tax-rate states like CA, NY, and NJ. Businesses may want to pay some 2018 estimated state taxes in 2017.
Property Tax Deduction: One version of the bill limits the property tax deduction (includes real estate) to $10,000. So for those with property taxes above this limit, it might be prudent to pay some 2018 property taxes in the 2017 tax year (assuming AMT doesn't limit the benefit).
Alternative Minimum Tax (AMT): AMT will likely be eliminated, or include much higher limits before being an effective tax, which will help higher taxable income follks.
What does this all mean to you?
It depends on your individual situation. Every taxpayer will see different affects as a result of the final bill. We'll be sure to keep you updated as applicable.
There are several other items included in the bill such as a repeal on the individual mandate on health insurance, corporate tax rate reduction, education credit adjustments, moving/medical expense changes, estate tax elimination, and more...
Feel free to contact us with questions as it relates to your specific tax return. We're receiving quite a few inquiries, so please be patient with our response time. We'll definitely get back to you!
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Merry Christmas: We wish you and yours a Merry Christmas. Here's to a great 2018!